The use of Artificial Intelligence is so deeply integrated into our lives that we don’t even realize that we are using it. Right from booking a cab through the mobile app to searching for directions on Google Maps, getting customized feeds from social media platforms, using face ID for unlocking our phones and making e-payments from the comfort of our homes, we are making use of Artificial Intelligence enabled services to make our lives easier.
But have you wondered about the use of Artificial Intelligence beyond that?
Today, Artificial Intelligence is becoming a game-changer for conducting the audit process. With the help of cloud accounting services, it is transforming the way auditing is done. Let us find out how?
Facilitate Risk-Based Assurance
Artificial Intelligence uses a risk-based mechanism that has the potential to identify anomalies based on risk and not rules. The AI-based tool leverages algorithms to identify emerging risks and flags transactions that deviate from the standard set. It offers an efficient way to report data, identify errors or unusual activities and report risks to clients.
This could further help auditors determine where to focus and test. AI helps save their valuable time and redirect their attention on critical issues.
Considering the volume of data flowing through most companies, it can be otherwise challenging for auditors to do this manually. AI can aid auditors to take a nuanced look at transactions that appear unusual. For example, the AI tool can efficiently identify unusual sales reversals happening in accounts receivable ledgers. It can indicate auditors to focus there.
Provide Actionable Information
AI enables the processing of large amounts of data and provides results based on trends, behaviour, patterns and secondary data. It can analyze a full population of data and provide actionable information that can help auditors mitigate the risk that they wouldn’t have even considered.
With the help of sophisticated machine learning-based models, auditors can significantly improve fraud detection. For example, AI can be used by auditors to review contracts. It enables auditors to review a larger number of contracts in a considerably shorter time span as compared to a traditional manual review.
In fact, in a recent pilot activity, AI tools have established greater accuracy to extract information from lease contracts using pre-selected criteria with a higher level of precision than the average human reviewer is capable of.
AI has the ability to streamline processes by automating everyday tasks and analyzing a large volume of data. AI implementation can significantly improve processes and working standards.
For example, auditors often have to check for management approvals on invoices over a certain amount, if there is a company policy. AI solutions can prove to be a boon by reviewing transactions and flagging those that violate pre-set rules.
Audit is a data-driven service and shifting repetitive tasks to machines can help save a lot of time and eliminate accounting errors. This leads to a better quality of services as auditors will have more time to devote to value-adding tasks in the audit process.
If you look at the recent reports, Artificial Intelligence in the accounting industry is expected to grow at a CAGR of 30% between 2022 and 2027. As a result, there will be a huge change in the auditing practices as firms will look at ways to streamline processes through more efficient ways of operating.
Managing Information Across Teams
AI will revolutionize the way auditors store and locate information. A metadata-driven document management platform can help store all the documents in a single place for easy access by all the audit team members. It will enable the audit team to collaborate in real-time and work on the same file to ensure that everyone is on the same page. This will also ensure that the team does not end up wasting time in searching for the latest version of a document and trying to locate the missing files or exchanging endless email chains.
Furthermore, with improved search capabilities, they can easily access the information they want with a help of a few clicks.
Wrapping It Up
Artificial Intelligence technology is making it possible for auditors to work smarter and better by automating mundane and repetitive tasks and optimizing their time. The time saved can be diverted to take on more challenging and important work for clients and to interact with CEOs, CFOs and company boards, thereby adding more value to the overall audit process.