The world of public accounting is ever-evolving, which is what makes it so interesting to most people that choose this career path. It used to be that audits involved toting around loads of papers and documents, but in this day and age, an audit can be completed almost completely paperless if the client’s processes allow for it. Over the past few years, there has been a lot of buzz surrounding the future of auditing with advances in artificial intelligence (“AI”).
While some people may believe that this evolution will make our jobs as auditors obsolete, the reality is that it will just change how we do our jobs. Though many audits are paperless now, there are still a lot of manual processes in auditing that will become much more automated.
One example of this is data mining. Data mining is the practice of searching through large amounts of computerized data to find useful patterns or trends. In cases where auditors have previously selected samples from large sets of data (i.e. the general ledger detail), certain AI software will allow the auditors to upload the entire general ledger detail and run data analytics on the entire population as opposed to only testing a sample.
Other subsets of AI include machine learning and deep leaning. Machine learning is the process by which a computer can improve its own performance (as in analyzing image files) by continuously incorporating new data into an existing statistical model. Essentially, computers will be improving upon their current programs without the intervention of human beings. Similarly, deep learning is a way to analyze unstructured data such as emails, social media posts and conference call audio files.
These advances in AI offer many new opportunities for us to analyze more data than ever before as part of our audits and to analyze different types of data. We have already seen certain audit AI software that has come to the market. However, the application of the software is limited. In addition, the audit standard setters are playing catch up in providing standards for how data analytics can be applied in an audit with the hope of replacing certain legacy audit procedures. While AI is here, its role in auditing is still in the future, though nearer than some may think. As these advancements make their way through our industry, we’ll learn and evolve together with our audit relationship.
Courtnee A. Greshner, CPA