Exploring AI and Audits

Auditors have been put on notice: artificial intelligence (AI) is here and it’s here to stay. The possibility of AI-enabled machines replacing human auditors is creating some angst. Are people right to be worried, and if so, what can they do to prepare for an AI takeover?

Those making predictions about the effects of AI on auditors (let’s call them clairvoyants) come from different backgrounds and have diverse views. Most, however, seem to agree that external auditing in some form will be around for a long time. As well, they agree that AI will play an ever-increasing role in the audit. Differences of opinion mostly relate to how much of the audit AI will be able to perform without human input, how long it will take before AI plays a significant (perhaps dominant) role and what the repercussions are likely to be. 

Profound Changes Coming

No prediction about the future will be entirely accurate. But how the future unfolds will profoundly affect the lives not only of auditors, but of all those associated with the auditing profession. Many people have a big stake in this game and they have to make important decisions right now. Should I make auditing my career? Should I switch my career from auditing to something else and, if so, to what? What should my university teach students about auditing? What continuing education do I need so that my auditing career survives and even thrives in the face of significant advances in AI? How should standards and audit regulations change to reflect increasing use of AI? 

To make better decisions, it is important to distinguish hype from realty. There is a need to be skeptical. All clairvoyants have unintentional or intentional biases. For example, some may be trying to sell AI products and services. Others may see their primary goal as calming fears about what the future holds, and inadvertently understate risks and the need for immediate action. 

Arguably, predictions fall into three overall categories:

  • AI will soon displace human auditors.Clairvoyants in this category might be referred to as chicken littles, predicting the auditing sky will soon fall on human auditors. 
  • AI will complement the work of human auditors, but never entirely displace them.These clairvoyants might be referred to as eternal optimists, looking at the future of human auditors through rose-coloured glasses.
  • AI will ultimately displace human auditors. These clairvoyants may be the realists. But, what does “ultimately” mean and what are the implications for decisions that have to be made now?

In the current issue of ThinkTWENTY20, Greg Shields briefly assesses an example view for each prediction category to help illustrate a few key issues regarding AI’s effects on the future of audit. Check out the issue here.




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