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In a global first for the network, PwC UK has undertaken a stock count audit using a drone, as part of a wider drive to harness emerging technologies to enhance audit quality and efficiency and transform the audit process.
Hemione Hudson, head of assurance at PwC, commented:
“Technology is an enabler for positive change and this drone-assisted stock count is an illustration of how we are using technology to enhance audit quality and efficiency. It’s just one
example of the benefits that come from bringing our technologists from across PwC together with our auditors.
“Drones are just one of a number of technologies that could improve audit quality in different ways across different sectors. But maximising the benefits of emerging technologies is reliant on having the right people with the skills to interpret the resulting data. We are constantly investing in attracting the best people into our business and training them in new technologies to ensure our audit quality continues to improve.”
About the drone stock count:
The drone, which was manufactured and operated by UK drone company QuestUAV, was used to capture over 300 images of the coal reserve at one of the UK’s last remaining coal-fired power stations, Aberthaw, in South Wales, owned by one of Europe’s largest energy firms, RWE.
The images from the drone were used to create a point cloud ‘digital twin’ of the coal pile in order to measure its volume. The value of the coal was then calculated to within 99+% accuracy based on that volume measurement.
Figure 1: Aerial image of the site
Figure 2: The ‘digital twin’ created of one of the coal heaps, showing the points measured by the drone
Figure 3: The images captured by the drone are processed using photogrammetry, where the images are ‘stitched’ together and compared to determine how many points they have in common with one another.
Richard French, audit partner at PwC, commented:
“Coal stock has a material value on RWE’s balance sheet, so we carry out an annual stock observation and evaluation as part of our audit process. We observe the manual coal count carried out by RWE’s external surveyor, then assess the resulting data which feeds into the financial statements. The traditional stock count method involves climbing over the coal pile and using a two metre GPS tracking pole to measure the area and elevation from the ground at various points. The data is then used to build a contour of the reserves and estimate its volume.
“While the traditional method remains reliable and will still be used for RWE’s formal year-end financial statements, the drone trial was conducted to explore ways of challenging the traditional method of stock counting. It was a classic example of new technology challenging the old - and based on our results, the potential is groundbreaking.”
The main objective of the flight was to assess the accuracy, efficiency and logistical benefits of using drones when compared to traditional surveying methods. Initial findings from the project concluded that:
The digital twin of the coal pile produced from the drone data can be viewed via PwC’s Geospatial app, a visualisation tool which helps the PwC audit team interrogate data about the inventory on site. Operational benefits of using the drone include:
While on site a multi-rotor drone was also used to take photos of the wider site, allowing RWE to inspect the condition of assets that are at height and otherwise difficult to access. This is just one other use case to demonstrate the benefits drones can have for businesses.
Elaine Whyte, UK drones leader at PwC, added:
“This trial with RWE is the first time PwC has used drones for audit stock count purposes. It demonstrates the powerful new perspective that we believe drones can offer for businesses across a wide variety of industries. Sectors with large assets in hard to reach areas are the most obvious starting points for expanding this kind of work further - from mining to agriculture and forestry.
“Our recent economic report1 showed that drones have the potential to not only improve UK productivity, but also offer significant net cost savings for businesses to the tune of £16bn by 2030. In this case, drones have allowed us to trial a more efficient service which has the potential to save both money and time, while allowing us to deliver greater insight too. There is also a clear health and safety benefit to using drones for this type of work, without someone having to climb over the coal pile.”
Figure 4: QuestUAV’s fixed wing drone, ready to take flight
Notes to editors
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