Being an auditor is not an easy task to begin with. On top of the daily responsibilities, they also have to make sure that the organization follows every rule and regulation set by stakeholders and the government. It’s a role that requires focus, accuracy, and constant attention to details.
As regulations keep changing and becoming more complex, traditional auditing methods are no longer enough to rely on. With a huge amount of financial data, multiple reporting requirements, and tight deadlines, it is no wonder that auditors who depend only on manual checks are having a hard time keeping up and risk missing important details.
In fact, according to PwC’s 2025 Global Compliance Survey, 82% of companies plan to invest more in at least one technology to automate and improve compliance tasks, because relying purely on manual processes is becoming unmanageable.
This shows why:
All of this makes one thing clear: the role of the auditor is changing. It is no longer enough to only confirm compliance—auditors now need tools that deliver accuracy, speed, and deeper insights to better help them conduct audits.
With these growing challenges in compliance, it is clear that a new approach is needed. This is where artificial intelligence (AI) is beginning to make sense in the way auditors work. As highlighted by the Journal of Accountancy, AI is already reshaping audit practices in several important ways:
One important shift an AI-powered tool brings is the ability to review all transactions, not just a small sample. Traditionally, auditors relied on sampling because it wasn’t practical to check everything manually. However, by having AI in the process, entire datasets can now be examined, giving a more accurate picture and reducing the risk of missed issues.
Another benefit is that AI can detect unusual or inconsistent entries much faster than manual methods. By scanning through large volumes of financial data, AI tools can highlight transactions that don’t fit normal patterns, allowing auditors to focus their attention where it’s most needed
Journal entries are often a key focus on audits. AI tools make this process faster by identifying which entries carry the highest risk and bringing them forward earlier in the audit process. This helps auditors concentrate their efforts on those with greater risk.
AI doesn’t just analyze the transactions; it also helps with planning. By analyzing entire datasets and breaking them into meaningful groups, auditors can better understand risks and adjust their audit scope accordingly.
Lastly, some AI-powered tools, such as DataSnipper, work as Excel add-ins and allow auditors to trace figures directly back to their source.
For instance, if an unusual entry is flagged by a formula, the auditor can click on that cell and instantly view the related document whether it’s an invoice, a contract, or a bank statement. This speeds up the review process and also makes it clear where the data originated, which strengthens both accuracy and transparency.
With these capabilities, AI shifts the auditor’s role in three important ways:
In the past, much of audit work involved verifying the needed requirements if they are met. With AI handling repetitive checks, auditors now have more time to analyze results, spot trends, and deliver insights that help top management make better decisions.
Traditional audits often uncover issues after fact-checking them. Good thing, AI makes it possible to identify risks earlier such as unusual transactions or compliance gaps, so auditors can address problems before they escalate.
Manual methods often relied on sampling, leaving some areas unchecked. AI allows auditors to review entire datasets, which gives a more complete picture of the organization’s financial health and lowers the chance of missing critical issues.
Auditing has always been about accuracy and trust. But the way auditors get there is changing. Below is a side-by-side look at how traditional practices compare with what AI-powered tool now make possible:
|
Area |
Traditional Approach |
AI-Driven Approach |
|
Scope of data review |
Auditors check only a subset of transactions for review |
Through AI-powered technology, auditors can now request full-data sets, lowering the chances of missing anomalies. |
|
Speed & efficiency |
Manual checks slow down the process, especially with large volumes of data. |
AI technology can process a large amount of data (e.g., journals, bank statements, contracts) and reconcile data far faster than manual methods.
|
|
Error/anomaly detection |
Relies mainly on auditor judgment, which may overlook subtle patterns. |
AI can detect patterns or irregularities in a large number of datasets that might escape human notice. |
|
Audit planning & risk assessment |
Scope and risk assessments are based on limited samples and past experience. |
AI helps refine audit scope by analyzing data trends, segmenting risk levels, and guiding resource allocation. |
|
Verification & traceability |
Traditionally, auditors manually trace flagged items back to supporting documents like invoices or contracts. |
Tools such as DataSnipper (with Excel add-ins) can link flagged entries to source documents like invoices or contracts, speeding verification. |
|
Quality & audit confidence |
Dependent heavily on the auditor’s skill, sampling judgment, and limited coverage. |
Full data review and automation checks improve confidence in findings and reduce risk of oversight. |
|
Cost & resource demands |
High labor cost, many hours spent on routine tasks. |
Lower manpower needs for routine checks, freeing auditors’ time to higher level work |
Knowing the difference between the two approaches helps put things into perspective. Traditional methods have served auditors well for years, but with the increasing amount of data companies generate, they’re no longer enough on their own.
AI-driven auditing doesn’t replace the auditor, but instead it gives them better tools to do their job. By understanding how the two approaches compare, it becomes clear why firms are turning to AI-powered tools to handle compliance and deliver deeper insights.
With the number of challenges an organization has to go through in order to be where they are now, failing on compliance is not something they can afford to take lightly. Beyond just meeting regulatory checklists, the cost of non-compliance can touch nearly every part of the organization—financial health, reputation, and long-term growth.
Some of the most common risks include:
One of the most common risks is the severity of financial penalties and legal costs. Regulators don’t just issue small warnings—they can impose hefty fines, sanctions, or even pursue legal action when compliance rules are ignored. What’s striking is how much more costly non-compliance is compared to compliance.
Research from Coforge, a global digital services and solutions provider, found that non-compliance can cost businesses at least 2.7 times more than the investment required to remain compliant.
On top of that, reputational damage can be permanent. When an organization is publicly penalized or accused of regulatory failures, trust among investors, customers, and partners can erode quickly. Unlike financial penalties, trust is not something that can be easily paid back. Reputational harm often lingers for years, making it one of the hardest risks to recover from.
Non-compliance often triggers investigations, forced audits, or increased regulatory oversight. This diverts management’s attention away from growth and innovation, slowing projects, and draining resources. In some cases, companies may face restrictions or lose licenses needed to operate because of this issue.
Lastly, in some cases, businesses can be regulated out of existence. Although rare, there are times when governments step in and decide that certain products or activities carry too much risk to society. This can range from materials proven to be hazardous, to industries considered harmful to society, or even activities that no longer align with public values.
For example, California passed a law banning the sale of non-rescue animals in pet stores to help combat puppy mills. Over the years, many industries have faced similar restrictions,. such as tobacco, asbestos, lead-based products, and harmful chemicals like DDT. These examples highlight how regulation doesn’t just bring fines—it can completely change or even shut down an industry.
From Challenge to Opportunity: What This Means for Your Firm
After looking at the risks of non-compliance, one thing becomes clear: organizations face stricter compliance expectations than in the past. But here’s the good news; what feels like a challenge can also be turned into an opportunity.
Instead of relying solely on manual checks, your organization can then start leveraging AI tools to support your compliance and auditing tasks. Below are some of the ways AI-powered tools can help make this possible:
Through the use of AI-powered technology, firms can now understand client processes in greater depth from the very first transaction to its entry in the general ledger. This allows auditors to review not just isolated pieces of data but the entire financial picture, improving accuracy and transparency in the way they do their job.
AI makes it possible to scan large volumes of transactions much faster. By doing so, it can highlight anomalies like duplicate payments or out-of-range expenses that would be easy to miss through manual sampling.
Many audit activities, such as verifying invoices or cross-checking records and verifying numbers, are time-consuming when done manually. However, automating much of this routine work will give auditors more time to focus on higher-value tasks like analysis and strategic recommendations.
Rather than just confirming that rules are being followed, AI can then identify patterns and trends that provide useful business insights. This allows auditors to move from a “checklist” role to a more advisory position, helping key decision makers to have a better overview of the organization’s data.
Keeping up with rules and regulations has always been part of an auditor’s job, but the pressure is now heavier than before. Instead of only checking if the rules are followed, auditors now have the opportunity to guide organizations toward stronger compliance by using modern technology such as AI-powered tools. This shift not only makes audits more accurate but also strengthens processes and helps organizations stay ahead of regulatory demands.
If your audit team is feeling the pressure of heavier compliance demands, we can help. At D&V Philippines, we offer flexible and cost-effective audit support services designed to make your processes more efficient without sacrificing quality. Get in touch with us today or visit our website to learn more about our tailored audit support solutions.
You can also download our whitepaper, Seasonal Audit Support for US Audit Firms, to see how our solutions have helped firms like yours manage busy seasons and improve results.