The cognitive audit
Cognitive technologies are an exciting opportunity, a significant challenge and as important to the auditor as they are to their clients, says Nick Frost
Today’s auditor reaches an audit opinion through a ‘human’ assessment of the organisation, and by performing detailed testing over individual elements of the accounts. We have made great strides in applying analytics to audit: we already use cognitive tools, for example to map transaction flows and forecast loan defaults. Cognitive tools available to the future auditor will more easily collate the mass of signals from a business, and better understand the entirety of the organisation.
Often significant financial errors or frauds can be linked to a flaw in an organisation’s culture or values and we’re already developing cognitive technologies to assess this. In terms of investment values, the morale of an organisation is often argued to be a strong indicator of future performance; cognitive technologies will interpret the sentiment within an organisation’s emails, voice communications, memos and reports. Cognitive technology will also allow the auditor to more readily draw on their firm’s collective experience.
Today’s auditor builds up industry knowledge throughout their career. They understand the market players, customer behaviour, the regulatory agenda, macroeconomic environment and stakeholder viewpoints.
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