Should My Firm be Worried About The Effects of AI on Auditing?

Significant advancements in technology modified the ways we perform our everyday tasks. With the presence of machines and robotic platforms, you can now finish your work with just the press of a button. It’s that simple.

Industries such as finance and accounting (F&A) are among the many to experience the upgrades brought about by Artificial Intelligence (AI). F&A tasks are made simpler and more efficient through AI, particularly the auditing process. But as the Australian fintech industry continues to mature, auditors and accounting firms are more threatened by the idea of losing their jobs and their companies being replaced by robots.  

Merging artificial intelligence and auditing is proof that the fintech landscape can offer a more innovative future for the F&A industry. 

But should your firm be worried about AI on auditing? 

AI will not take your job away. With the knowledge of what is coming, firms and professionals should not worry about the integration of AI into their professions. Robotic accounting strengthens the idea of productivity and efficiency for your employees, allowing you to leverage their accounting skills.  

When repetitive tasks such as bookkeeping, manual data entry and payroll processing are taken care of, accountants can focus more on delivering quality solutions for your clients. AI in accounting and audit gives your employees a better chance of making better decisions and raises the bar for quality audit services. 

RELATED: Artificial Intelligence: What is AI and Where We are  

Benefits of Artificial Intelligence in Auditing 

Harnessing automation, robotics and cognitive technology in auditing reduces the chances of committing errors along the way. AI also processes a huge amount of data in a shorter time span compared to manual entry.  

Here are some of the benefits of AI in auditing:

1. Increased Accuracy

AI technology in auditing offers enhanced accuracy compared to manual methods. By automating data extraction and analysis, AI eliminates human errors and inconsistencies that can occur during traditional auditing processes. This ensures more reliable and precise results, minimizing the risk of financial inaccuracies going unnoticed. 

According to Forbes Insights, AI can comb through reams of data faster and more precisely than any person or team of people could. For example, a large number of leases can be read and analyzed thoroughly by a machine and extract the necessary data by setting out the criteria upon automation. 

2. Time and Cost Efficiency

Implementing AI in auditing can significantly reduce the time and resources required for conducting audits. AI-powered software can swiftly analyze vast amounts of financial data, identifying patterns, anomalies and potential risks, much faster than human auditors. 

This saves valuable time and allows auditors to focus on exception handling and more complex tasks. In addition, the use of AI reduces the need for extensive manual work, thereby lowering auditing costs in terms of labor and resources. 

3. Enhanced Fraud Detection

AI technology enables auditors to identify fraudulent activities more effectively. Machine learning algorithms can analyze large datasets and detect irregular patterns or anomalies in financial transactions.  

By flagging suspicious activities in real-time, AI helps auditors proactively address potential fraudulent behavior or errors, enhancing fraud detection and prevention efforts. This proactive approach not only protects the organization's financial assets but also helps maintain its reputation and trustworthiness. 

The Bottom Line 

While it is true that AI produces more precise results, you also have to consider that human judgment is still relevant in achieving accurate audit records. As you streamline your bookkeeping tasks, the scope of your employees' role widens, giving them a chance to upgrade their skills while doing their job.  

They can analyze deeper and broader data for a more value-adding audit result. With monotonous workload off their shoulders, your employees can do tasks outside their regular responsibilities. 

Giving your employees a chance to nurture their audit skills gives you the chance to leverage their F&A skills and bring more high-quality services to your clients. 

The advantages of artificial intelligence in auditing are all targeted towards an innovative future of the accounting and audit industry. With AI on the rise, your firm can stay ahead of the game with a smarter and better working environment. 

Get reliable audit support  

Increase the productivity of your current team without the hassle of sourcing, onboarding, and training a new resource. At D&V Philippines, we provide scalable solutions for firms and private companies across various industries. Schedule a free consultation with us today to learn more about how we can help you. 

You can also read our whitepaper, Business Analytics whitepaper to learn how we can assist in automating accounting tasks and expanding a firm's talent capacity. 

This post was first published on 8 April 2019 and edited on December 8, 2023. Edited by: Angelica Garcia