How Artificial Intelligence Can Transform Audit Processes (Accensis)
TechnologyJanuary 13, 2023 - Accensis Chartered Accountants (SA) and Registered Auditors
This is a thought leadership article by PrimeGlobal member firm Accensis, discussing how Artificial Intelligence can transform audit processes.
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AI and the Auditing Process
As business evolves in today's corporate climate, maximising the use of technology-based aids is vital.
As auditors encounter increasingly sophisticated systems, understanding how to give assurance on complicated client systems while using advanced technologies and data analytics during audit work has emerged.
In its simplest form, artificial intelligence is a field that focuses on computer science to enable problem-solving. Within the auditing field, technological advancements have created numerous and significant research possibilities.
As a result, to maintain a competitive edge, the audit profession is evolving by adopting AI technologies.
Given the hype surrounding AI, we can be sure that there will be a significant impact on the business world for the foreseeable future.
AI should be explored if firms seek a new technique to improve their auditing process.
As part of the auditing process, one of the elements that must be evaluated is the risk of a material misstatement or sufficiently incorrect information. This can boil down to human error.
Hence, auditors are expected to evaluate the transactions to ensure no misstatements.
It could be challenging for auditors to detect irregularities later if illicit transactions and/or other anomalies are not identified immediately.
There is a growing trend of using AI in auditing in countries like the United Arab Emirates. Automating human tasks such as data entry and analysis is the primary reason for its growing popularity.
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Audits have become more efficient and cost-effective, providing greater insight for audit teams into the business they are auditing.
Bye Bye Human Error
Another benefit of using AI in auditing is that it can help to reduce the risk of human error. Audit teams can quickly identify and correct any mistakes by automating specific tasks.
This is very important in cases where the accuracy of financial data is crucial.
Here are just some of the pros and cons of adopting artificial intelligence in auditing:
- Immature auditing frameworks or regulations specific to AI
- Emerging nature of AI technology
- The potentially steep learning curve for the AI auditor
- It requires large amounts of data.
- Loss of jobs
- The workload of auditors is reduced since there is no need to go-back-forth for asking questions to the client.
- Cost reduction: Using AI reduces the cost involved in manual hours of research and analysis.
- Audit Quality: AI systems continuously learn and adapt to datasets to improve anomaly detection accuracy as more data is processed. Therefore, the use of AI/machine learning increases audit quality.
Artificial intelligence promises to transform more than just the way enterprises do business. It will touch every corner of society. Auditors should ask themselves whether organizations and audit teams are ready for the tough questions around AI and the approach for auditing it. This emerging phase offers an excellent opportunity for the business and information technology community to step up, prepare and establish sound governance around auditing.
"Artificial intelligence promises to transform more than just the way enterprises do business. It will touch every corner of society. Auditors should ask themselves whether organizations and audit teams are ready for the tough questions around AI and the approach for auditing it. This emerging phase offers an excellent opportunity for the business and information technology community to step up, prepare and establish sound governance around auditing" Ebrahim Kaloo, Audit Trainee, Accensis
Accensis Chartered Accountants (SA) and Registered Auditors
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