In the last couple of years, AI has evolved exponentially and has been a game-changer for many industries. Be it self-driven cars, smart homes, drone delivery, or fashion styling, Artificial Intelligence has permeated almost every field. COVID-19, on the other hand, has still heightened our reliance on technology and made it more important than ever to adopt automation and AI.

In recent years, it has started sneaking into the accounting industry as well, in particular auditing. AuditMap Technologies, an AI consultancy is an example. The company is making inroads in helping organizations bring AI in internal audits.

Its CEO & Co-founder, Mathieu Lemay shared “We were working with a development bank that was evaluating a country’s financial risk. To do this, the bank needed to focus on several search criteria, such as risk type per year for the country. Using AI, the bank could recombine this information dynamically, automatically tally the results, gain high-level insights relative to their search criteria, and dive deep into the details of the identified risks. Absent AI, the internal audit team would have had to manually tally this data.”

The Ottawa, a Canada-based firm recently partnered with Deloitte to help its clients deploy Artificial Intelligence in internal auditing. Forum Credit Union, on the other hand, is looking into RPA (Robotic Process Automation), an automation that can naturally progress to AI. Rick Wale, its vice president said, “I see AI as a supplement for human intelligence, as it can help auditors hone in on subtleties humans might never recognize”.

Just like Walke, many other experts are trusting the potential of AI in the audit. With the use of AI, enormous volumes of data can be analyzed to identify anomalies, insights, relationships, and patterns that are not easily apparent to the human eye. AI also has the potential to bring about a higher degree of standardization and the ability to monitor the quality of numerous engagements.

It also creates an efficient way when it comes to tasks like data collection, analysis, and data prediction. AI can perform these manual tasks at the click of a few buttons. It would no longer require human intervention to write scripts, memorize rules, or create tests.

Secondly, AI-based tools flag data based on risk-based mechanisms. This can help in identifying unusual payment activities that traditional counting methods could have skipped. AI also has the ability to evolve with the data. This means, when you enter a large data set into an AI-based system, it cross-checks the data that already exists and checks for correlation, thus ensuring accuracy.

AI also reduces the time required to process data. Larger data sets and ledgers can be created, processed, and analyzed with little manual effort. This frees up the accounting team. Moreover, AI algorithms analyze data without any bias. The complex technology of Artificial Intelligence brings in more transparent results. Thus, AI is more legal, ethical, and responsive than humans.

AI also serves as a helping hand and a reliable management tool for modern-day auditors. It allows them to work smarter. From reducing the workload of the auditors to cutting costs, and from increasing accuracy to improving audit quality, AI systems can continuously improve the tedious and cumbersome job of auditing.

However, it is imperative for the auditors to have a good understanding of the benefits and risks associated with AI as well as the data produced by it. It is important that we see AI, analytics, automation for they are – enablers. They can revolutionize an auditor’s role but not replace it. Human insight and experience will still be required to understand the output and the anomalies, insights, or patterns in the overall context.