Artificial Intelligence in auditing — Is the world ready!
You might think an audit is the last thing your business needs, but they aren’t always bad. However, Auditing is the only true measure of reliability and genuineness in the financial sector. Technological innovations in businesses are significantly disrupting the traditional finance departments, payments, and entrepreneurial finance. Given the labour-intensive nature of auditing and the need to improve audit efficiency and quality, there is increased attention to revolutionize and find newer solutions. The MSMEs of the
auditing world are now gradually converging their auditing practices with the
Information Technology Sector.
The Covid Pandemic has affected most of the small, medium, and independent auditing firms, like every other industry, quite adversely. Most of the employees are either working from home or are not productive enough due to a lack of resources. For most organizations, this pandemic came as an alarm, and no organization is not left out of its effects. This sudden wake to reality is making people realize that we have a long way to go in making our offices 100% IT-enabled and we certainly do not have the time.
All of us were living under a rock when we thought that such convergence might take a lot of time and would happen gradually and organically for most of us. Yet, one must turn the pages of history to understand that once the resolve is there, once the ‘need’ is there, strange and immediate things have taken place.
In the year 1960, when United States President John F Kennedy resolved to send an American to the moon, many did not believe him. To be honest, quite a few theorists still do not believe that man has walked on the moon. Yet, it has happened. Today, when the coronavirus epidemic has made mega economies, like the United States and Japan, slowdown and has brought large economies like India on the verge of it, people who have taken refuge from the virus and are now either sitting idle or working from home are realizing the power which a pandemic has over economic growth. What is worse is
that many immunologists, doctors, and even Bill Gates have said that pandemics would continue to occur in one form or the other until we find a common vaccine for such viruses.
So what is the next step? Letting our business go into decline is not an option. Taking the help of artificial intelligence to ensure 24 x 7 functioning of organizations even during pandemics is an option everyone is seriously considering. This would effectively reduce our dependence on human resources. The world of auditing is not going to be left untouched as well. As it is, in the near term, the usage of artificial intelligence, blockchain, automated data, and data analytics is going to reduce the amount of personnel one would need to audit any entity. Eventually, automated software would take up the role of probing the books online and are going to simply highlight the outliers and anomalies in data for an auditor to take appropriate action upon.
Auditing is going to look quite different in the future as compared to today. Artificial Intelligence is going to help auditors in analyzing a larger amount of data in a shorter period. So, once they find outliers, if any, they would help the auditor ask precise questions from the management. Artificial Intelligence would enable auditors to work smart by helping them utilize their time effectively and by giving an even better quality audit.
The time has come, when the auditors of today will have to start preparing for the technological changes to come. Keeping up with technological changes and being adaptive and flexible enough with the latest trends will bring changes in the world of auditing. To achieve that end the firms need to be conscious of the technological advancements, train their personnel, and invest in dedicated servers to run from anywhere in the world. Therefore, the existing auditors must upgrade their skill sets and ride the wave of change that is due to come in the next few years.
The thoughts expressed here are from my experience working with a chartered accountancy company in my individual capacity.
