What are the recent trends in auditing?

Artificial intelligence (AI) is transforming every industry and organisation. The rising use of AI and automation is one of the most significant trends that will also impact the future of auditing. By automating procedures and improving audit quality, AI will radically change the way of auditing.

One of the most important areas where AI is contributing and adding value in the audit environment is during the risk assessment process. AI can more effectively assist the auditor in identifying non-routine, duplicate, or unusual transactions for further investigation.

Rough data can also be cleaned and sorted faster, allowing the auditor to spend more time analysing and performing analytical procedures that require judgment. This helps practitioners make the best use of their time in the audit.

Auditors can identify anomalies in larger data sets that will result in a more complete audit since smaller transactions are also considered where they were previously overlooked because of materiality considerations.

Furthermore, applying AI and data analytics tools can increase audit quality by lowering the likelihood of errors and omissions. These technologies can consistently and objectively assess data, decreasing the reliance on human judgment, which personal biases or previous assumptions can influence.

Due to more clients using complex systems, the auditor is also expected to evaluate the system and ensure it works as expected and is aligned with all relevant accounting standards.

For the accountant, it also improves output quality by reducing human error. AI can automate repetitive activities like data input, account reconciliation, and report creation. Since the client’s information is readily available from their accounting systems by simply generating a report, more frequent checks can be implemented throughout the year to prevent and detect errors earlier.

This also saves audit time since reports and reconciliations are neat, mathematical, accurate and readily available from the client’s system while it contains fewer human errors.

The time saved by AI allows the auditor to focus more on value-adding services.

Can AI take over auditing?

Auditors are safe for now since there are too many skills that computers cannot yet replicate. While computers are excellent at detecting and possibly fixing errors, humans are still required to do so. Auditors will, however, need to adapt and develop new skills to remain relevant continuously.