AI in audit: Next-gen solutions for auditors

How is AI changing audit?​

It is no exaggeration to say that artificial intelligence (AI) has changed the world. Since the launch of OpenAI’s ChatGPT in late 2022, it seems every sector is exploring ways to harness the vast potential of this technology. From chatbots and virtual assistants to specialised industry software, people everywhere are rapidly becoming used to the immediacy, convenience and efficiency of anything powered by AI.

The audit and assurance sector is no exception. A ‘super brain’ capable of analysing millions of data points in mere minutes is a technological advantage for any auditor. As proprietary and commercially available AI-driven platforms surge in popularity, the world of audit is changing.

From audits that never sleep to more value-add between auditors and their clients, here are three ways that AI is transforming the audit landscape…

1. Full audits become scalable and efficient

How long would it take a human to manually sift through a million data points? Nobody knows, because it takes too much time and money to be practical.  That is why auditing typically involves selecting representative samples rather than combing through massive datasets.

AI is already capable of sorting vast amounts of data in seconds. That means a future where auditors no longer rely solely on sampling is reasonably foreseeable. Without the constraints of time and cost, audits could provide deeper insights, based on  ‘the whole story.’

Benefits for financial reporting

This could also enable real-time auditing and disclosure of a company’s financials. As you can imagine, that level of efficiency means AI-powered audits could one day reshape the field of audit completely.

2. AI enables auditors to spend more time with clients

Technology has already revolutionised audit. AI is just the next step. Some of us will recall needing to digitise manual ledgers. More recently we have adopted automation for data processing and sorting.

Each evolution has served to free up auditors to provide more value to our clients.

Technology has enabled us to reallocate our time to gain deeper expertise and insight, which has ultimately become a key feature of the auditor-client relationship.

Clients and their auditors both benefit from engaging in more poignant discussions around a client’s business. Many auditors have an affinity for numbers and are skilled in spotting correlations and trends in data. These conversations provide auditors additional opportunities to  share their observations with clients, who can use the insights to improve operations.

This type of meaningful work is also more satisfying for auditors than repetitive, low-value tasks. This isa shift we're seeing across many industries and one that’s worth celebrating.

3. Improved audit quality

The ability to evaluate complete datasets, regardless of size, has an undeniable impact on audit quality.

By leveraging AI, we can:

• Uncover minor anomalies.
• Detect error and fraud more effectively.
• Run a greater variety of queries.
• Identify areas that need attention fast.

These benefits mirror those found in other sectors using AI, such as healthcare.In rare instances, even the most experienced doctor can miss something in a scan result. AI can cross-check these results to reduce the likelihood of oversight. Secure AI chat engines can also directly answer questions about data results. At this stage, such tools are best used by a skilled auditor. However, it can provide broader insight into the meaning of data resultsand  certainly adds an interesting new dimension.

The future of AI in audit: Governance, transparency and ethics

The possibilities of AI in the audit space are endless, and something we will continue to observe with keen interest.

Ethics and integrity must be at the forefront of our reliance on automation and artificial intelligence in auditing.

We must always ensure complete confidentiality of a client’s financial data. This means maintaining a clear line between using open-source AI programs and those in a secure, controlled digital environment.

We also cannot overlook the potential for AI to get it wrong on occasion. Anyone who has used AI chat engines to answer questions will know they are not always accurate. The potential for inaccuracy in an audit can have serious repercussions.

For this and other reasons, it is critical to balance AI capabilities with the judgement of an experienced professional An experienced auditor has sifted through hundreds of clients’ financials across diverse sectors. This experience enables them to make connections that AI cannot. We will always need that human element.

However, there is still much to be appreciated and explored. AI’s potential to uplift efficiency, engagement, and quality in audit is undeniable. It is  an evolving area that RSM is committed to engaging with for the benefit of our clients.

For more information about RSM’s expert audit and assurance services, please contact your local RSM office.