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How will artificial intelligence add value to audit processes?

Author: ICAEW Insights

Published: 20 Jun 2022

From booking an Uber or filtering spam emails, artificial intelligence underpins many routine tasks we take for granted. Now AI has audit in its sights. Jayson DeVries explains why the time is ripe.

We’re used to seeing dramatic media portrayals of artificial intelligence (AI) and machine learning (ML) depicting futuristic technological advances straight out of a sci-fi novel – often with the foreboding suggestion that these innovations will rise up and take over.

In truth, the practical implications of AI extend far beyond the restricted – yet sensational – spheres of robotics and self-automated machines. In fact, the most influential uses of AI are the least likely to grab headlines.

Booking an Uber, searching for directions on Google Maps, and filtering out spam emails are simple tasks that we take for granted, often without questioning the technology that facilitates them. And it is AI driving the performance of these platforms that are so deeply integrated into our lives.

Auditors are not immune to the pervasiveness of AI in society and the impact on their everyday activities. In fact, in the past few years, we’ve seen successful application of AI in the realm of automation. Recent reports on AI’s impact on the accountancy industry forecast average annual growth rates of 30% between 2022 and 2027. As a result, audit practices are poised for widespread changes, as firms seek to streamline processes through more efficient ways of operating.

For those concerned about the impact of AI on the role of accountants, current levels of sophistication are nowhere near capable of replacing accountancy jobs. Human intellect will always be an integral aspect of the role, for evaluating and understanding data or offering consultancy services, for example. AI will complement established practices by helping to refine day-to-day life in the role.

Waging the war on admin

Firms should aim to give all employees platforms that allow them to excel and make a tangible contribution to performance. Instead of overloading auditors with often laborious and demotivating administerial tasks, providing stimulating work holds the key to building an engaged workforce – while at the same time improving productivity and employee retention.

Cultivating this environment is impossible if your employees are wasting time on menial administrative tasks. Given the current war for talent, accountants who are frustrated with the tedious nature of data entry responsibilities will likely look elsewhere for roles with more purpose and value.

AI is pivotal to freeing up time for workers and improving efficiency in the accounting industry. Fewer hours devoted to tasks that can be automated will also streamline business operations. Analysis by PwC found that 54% of executives believe that AI has already improved the productivity of their business.

At the same time, using technology to facilitate the mundane tasks affords auditors more time to take on more challenging and important work for clients and spend time on the tasks they are best at or the more difficult responsibilities that will make a tangible difference.

Intelligently traversing the audit trail

Improved search capabilities facilitated by AI will revolutionise the way auditors store and locate information by providing tailored suggestions based on keyword searches and considering a wider array of factors to produce more accurate results. This will extend to photos and videos through the increased adoption of advanced image analysis.

It means that searching for content and files will change from finding documents with a specific text string, to a ‘Google-like’ set of results and answers based on an understanding of what you are looking for. AI will help to provide better and more relevant content recommendations to suit the task you’re trying to accomplish.

Managing information across teams

The way we store information can also be enhanced by embracing AI. A metadata-driven document management platform can help audit teams avoid unnecessary meetings and endless email chains by storing all documents in one place.

Information management technology such as this allows colleagues to collaborate in real-time, editing the same file to avoid confusion and ensure everyone is on the same page. As a result, less time will be wasted searching for the latest version of a document or chasing colleagues trying to locate missing files.

AI is undoubtedly critical to the future of the audit industry. But rather than threaten the existence of the auditing profession, its implementation presents an opportunity to improve processes and working standards. The end result will be a better quality of service, as auditors will have more time to devote to coming up with practical solutions for clients.

Jayson DeVries is Senior Product Manager and Artificial Intelligence Expert at information management specialist M-Files

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