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How AI is Revolutionizing the Audit Profession: Opportunities and Safeguards for Auditors

Artificial intelligence (AI) is influencing every aspect of our lives, directly or indirectly. AI and “augmented intelligence” can help humans perform better at their tasks and be more efficient. AI-based solutions are becoming more common and affordable, with ChatGPT serving as a prominent recent example. Opportunities exist across different professions to apply AI, and tech-savvy leaders can create compelling use cases for AI so that mundane tasks can be offloaded to AI solutions, and human intelligence can focus more on critical and creative thinking.

The latest advances in technology promise significant benefits for the audit profession, with a number of key drivers signalling the need for technological change in audit. Such drivers include the rapid increase in volume of data, changes in business models, the shift towards automation and the demand for a proactive and forward-looking approach to audit. These developments require auditors to be technologically sound to enable them to continue servicing businesses and to execute high quality audits.

What does this mean for auditors as people?

Certainly, this is happening with Big four firms and mid-tier firms. However, as discussed in ACCA’s report The Passionate Practitioner, there is also evidence that this is happening within SMPs too, which are using technology to free themselves from routine compliance work and focus on deepening their relationships with clients and creating value for both their client base and their own businesses (ACCA 2019c).

As CA ANZ’s report The Future of Trust highlights, it is not the shift towards increased use of technology that is damaging trust in the delivery of professional services, but the accompanying move away from face-face contact (CA ANZ 2019). Focusing therefore on deepening their relationships with clients will also ensure trust is maintained in a digital world.

The importance of human relationships between businesses and their auditors, was discussed in all panel discussions supporting this research. Audit practitioners and business representatives emphasised that human relationships remain of vital importance. Some of them find that the automation of routine work provides an opportunity for human interactions to be more meaningful.

Potential Benefits of Leveraging AI in Audit

AI and other emerging technologies can save valuable time and resources by offloading repetitive and mundane tasks from auditors. This can help auditors focus more on areas where creativity and critical thinking are important.

AI solutions not only assists experienced auditors. They can also be leveraged by junior auditors, both to save time and enhance knowledge faster and to further skillsets for existing and emerging practices and technologies. Additionally, auditors can leverage AI solutions in enhancing auditing skills and knowledge on emerging technologies such as autonomous vehicles, blockchain, various connected devices, etc. AI can also assist the audit function in addressing skills gaps, to some extent, through the dissemination of knowledge on specific subject matters.

AI Safeguards to Be Considered by Auditors

AI solutions are as good as the training of the models and datasets used. Auditors need to be mindful of a few cautionary points while using AI solutions, such as:

  • Public AI uses the data provided by users for further learnings. So, auditors should be cautious not to provide sensitive corporate or client information.

  • If AI solutions are implemented in-house, auditing functions need to ensure that the systems are trained well using adequate datasets and that the training is continuous.

  • The audit programs provided by AI-enabled solutions should be reviewed and adjusted according to scope and objectives of the engagement.

  • AI models must be re-trained with datasets so that the outputs can be further optimized.

Technological empowerment is a double-edged sword. IT skills are paramount yet extremely short-lived. Even trained IT professionals who find themselves out of the workplace for an extended period rapidly suffer ‘skills erosion’ and can struggle to re-enter the workplace. A key skill for auditors – at least during the coming years – will be the flexibility to adapt to a working environment which will continue to evolve.




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