ARTIFICIAL INTELLIGENCE: NEED OF THE HOUR
THE PHASE IS OF ARTIFICIAL INTELLIGENCE
AUDITORS, IT’S HIGH TIME TO ENVISAGE Its RELEVANCE
LET’S APPLY THIS CONCEPT TO CONDUCT AUDIT WITH THE DUE DILIGENCE
Over a last few years, there has been a tremendous increase in the no of organizations: small or large, domestic or MNCs. With the operation & processes going countless, it calls for the application of AI tools.
AI has led to the creation of Next- generation workplace that thrives on seamless collaboration between enterprises and individuals. On one hand where AI is praised for being a boon to entrepreneur, at the same time, it is criticized too for replacing human intelligence. But one needs to understand that human resources are not made obsolete with introduction of AI in working rather their efforts are bolstered by emerging tech.
COMING TO AUDITOR’S PERSPECTIVE: An auditor holds a unique assurance whose work highlight gaps in compliance, quality etc. Auditor’s scope is broad & includes variety of areas like:
- Review of policies & procedures
- Check application & authenticity of controls whether IT or Manual
- Adherence to applicable laws & regulations
- Physical verification and much more
Auditors responsibility isn’t only restricted to analyze the operations & systems instead he/she is expected to foresee potential future opportunities, risks & give insight before any issue actually arise.
AS PER STUDY the 5 mega-industries that rely upon AI are: Manufacturing, Healthcare, Advertising, Transportation & E-commerce. Auditing such industries which are heavily regulated become a challenge for auditor to timely generate Audit Report. LET’S have a glance at some of challenges that an internal auditor faces:
- As a result of high volume of report data, RICH DATA POOR INFORMATION situation is emerging across the audit portray.
- Internal auditor need to be updated with the recent technology risks & control to perform audit.
- With the pressure to deliver quickly, assessments discussed within report are routine based leading to lack of coverage.
- Reviewing large enterprise control environment is expensive and time-consuming.
- Internal audit & risk management function over evaluate areas with high risks while ignore low-risk areas.
Thus it’s indeed important to understand the emphasis of AI tools in audit. Let’s have a look at how AI can be a GAME-CHANGER for the auditor.
ARTIFICIAL INTELLIGENCE IN ACCOUNTING:
AI processes documents in real-time using natural language processing and computer vision to generate reports also in real-time. Such reporting provides insight, ensuring that the enterprise can be proactive and change course if necessary.
- Machine Learning (ML) algorithms scrutinize voluminous data, identify potential fraud issues, and flag them for review to avoid loss of revenue
- Use of AI in accounting help to analyze & automate document handling processes and manage regulatory compliance.
- AI powered invoice management system can handle much of invoice processing steps, fixing issues with incomplete data that obstruct smooth invoicing process.
ASSISTING WITH AUDITING & COMPLIANCE:
- Use of AI can help corporate finance stay compliant with regulations, laws & acts especially in heavily regulated industries such as healthcare, energy etc.
- AI enabled systems can automatically read and complete compliance documents, file paperwork.
- Besides these AI algorithms proves useful to keep a track around income & expenses.
- Machine learning algorithms learn acceptable patterns that help to potentially detect fraud. Such activity can be easily forwarded for further follow up & review.
- AI algorithms also help the auditor to calculate ROI.
BUT ONE THING TO CONSIDER: If there’re pros then definitely leaving a space for cons as well:
- Blind adoption of AI in audit could lead to reputational risk in the event of AI failures.
- Staff training for properly & smooth functioning of AI is expensive as well as time consuming.
- There is assurance but not guarantee that all sets of controls will be identified by the AI algorithm.
- Supervised learning is suspected to experience biasness.
- Often there comes info which is outside the audit report & working papers thus with application of AI, such information become out of reach.
RESULT: WHETHER TO GO AUTOMATED OR NOT
On surveying the pros and cons of AI, it is recommendable to integrate audit with artificial intelligence. No doubt that cons do exist but can be mitigated. The things which could make it a hit show are efforts, cooperation and support from auditors.
Auditors are suggested to streamline themselves with the existing and upcoming AI tools to accomplish their objective in real-time. So we shall welcome AI in audit and automate required workings.
LET’S GO AUTOMATED
LET’S GO SEAMLESS AND LET’S PROGRESS TOGETHER