PwC has completed its first stock count audit using drone technology. Here’s how…
In a global first for the firm, PwC UK has undertaken a stock count audit using a drone.
This is all part of PwC’s wider drive to harness emerging technologies to enhance audit quality and efficiency and transform the audit process.
The drone, which was manufactured and operated by QuestUAV, was used to capture over 300 images of the coal reserves at one the UK’s last remaining coal-fired power stations, Aberthaw in South Wales.
The images from the drone were used to create a ‘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.
PwC audit partner Richard French said: “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 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.”
French explained that while the traditional method remains reliable and will still be used for RWE’s formal yearend 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,” he pointed out. The main objective of the drone flight was to assess the accuracy, efficiency and logistical benefits of using drones when compared with traditional surveying methods. Initial findings from the project concluded that:
• The traditional method of manually traversing the coal pile can take around four hours, whereas using a drone it can be done in half-an-hour – a reduction of 85%.
• The drone captured some 900 data points per cubic metre, obtaining impressive overall accuracy levels of 2cm. This compares with the 1,200 readings taken across the whole site using the traditional method. That means the drone enhances accuracy by providing a true, continuous representation of the coal pile.
• The preparation for the drone flight requires access to only a limited area of the coal pile and therefore poses less of a health and a safety risk, particularly when parts of the coal pile are unstable.
• The flight does not interrupt normal operations on the coal pile, for example movement of machinery, and so is a less disruptive method.
The team viewed the drone data via PwC’s Geospatial app, a visualization tool that helps the audit team interrogate data about the inventory on site. It found the operational benefits of using the drone included:
• More efficient monitoring and management of the Aberthaw site, which covers a total area of 200 hectares (for example how to best store the coal to free up the most space).
• Improved knowledge on the landscape around the site using aerial images, for example for vegetation management.
• Providing valuable insights on the health and maintenance of the wider power station assets.
While on site the multi-rotor drone was used to take photos of the wider site, allowing RWE to inspect the condition of assets that are high up and otherwise difficult to access. This, says PwC, is just one other use to demonstrate the benefits drones can have for businesses.
PwC’s UK drone leader, Elaine Whyte, added: “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.”
She pointed out that a recent PwC report showed that drones have the potential to not only improve UK productivity, but to offer significant net cost savings for businesses to the tune of £16bn by 2030.
• Check out PwC’s report, entitled ‘Skies the limit: the impact of drone on the UK economy’.