By Express News Service
Auditing firms use artificial intelligence (AI) tools to detect corporate frauds that auditors may miss. The big four accounting firms are investing significant amounts in gearing up to invest big money in AI and cloud services. TNIE asked Sriraman Parthasarathy, partner, Deloitte India, about the use of AI in audit work. Excerpts from the interview:
How prevalent is the use of AI in auditing?Large firms have already adopted AI for specific audit activities and they are now looking to scale up the use of the technology. This requires substantial investment and the need to build skill sets. As a result, smaller firms are yet to catch up. We need to be mindful of data confidentiality and security for leveraging AI for audits. Hence, publicly available generative AI platforms cannot be leveraged for audits straight away.
What part of the audit work can be done through AI? The possible areas where AI can be effective are financial statement review—disclosure compliance, tick and tie (the mechanical process of checking every figure and process for error); improved data analytics; audit confirmations tracker and reconciliation; test of detail on areas such as revenue, operating expenses, validation of changes to masters; and automation of various recalculations that are done as part of audit, for instance, depreciation, inventory valuation. Also, fraud detection through smarter journal entry analysis and reviewing agreements and contracts, and extracting key terms are some of the areas where AI is being used.
Kindly elaborate the different AI tools used for audit While there are several tools for leveraging AI for audits by seamlessly integrating AI with the robotics process automation/predictive analytics, we can get the best out of generative AI.
How much has Deloitte automated the audit practice using AI? There are several global initiatives by Deloitte to extensively leverage the power of AI on audits in a variety of areas. The following areas are worth noting; Data Analytics Reviewing contracts and extracting key info Audit information extraction from source documents Smarter review of bank statements and reconciliations
Do you think the use of AI in audit can take away a lot of jobs? If yes, what kind of jobs? AI can help auditors in further automating repetitive tasks and improving the coverage and the quality of audits and it will not take away jobs. It will help auditors better utilise their time to do a smarter review of the output, especially when carrying out mundane tasks.
However, to make this happen, there is a compelling need for talent transformation at the grass root level.
Do you think AI could allow smaller audit firms to compete with larger firms like yours? Investments and skills required for leveraging AI is critical and this would certainly help in enhancing the quality of audits significantly. There is a need for a fine blend of audit skills and AI skills to get the best out of the AI.
Auditing firms use artificial intelligence (AI) tools to detect corporate frauds that auditors may miss. The big four accounting firms are investing significant amounts in gearing up to invest big money in AI and cloud services. TNIE asked Sriraman Parthasarathy, partner, Deloitte India, about the use of AI in audit work. Excerpts from the interview:
How prevalent is the use of AI in auditing?
Large firms have already adopted AI for specific audit activities and they are now looking to scale up the use of the technology. This requires substantial investment and the need to build skill sets. As a result, smaller firms are yet to catch up. We need to be mindful of data confidentiality and security for leveraging AI for audits. Hence, publicly available generative AI platforms cannot be leveraged for audits straight away.
What part of the audit work can be done through AI?
The possible areas where AI can be effective are financial statement review—disclosure compliance, tick and tie (the mechanical process of checking every figure and process for error); improved data analytics; audit confirmations tracker and reconciliation; test of detail on areas such as revenue, operating expenses, validation of changes to masters; and automation of various recalculations that are done as part of audit, for instance, depreciation, inventory valuation. Also, fraud detection through smarter journal entry analysis and reviewing agreements and contracts, and extracting key terms are some of the areas where AI is being used.googletag.cmd.push(function() {googletag.display(‘div-gpt-ad-8052921-2’); });
Kindly elaborate the different AI tools used for audit
While there are several tools for leveraging AI for audits by seamlessly integrating AI with the robotics process automation/predictive analytics, we can get the best out of generative AI.
How much has Deloitte automated the audit practice using AI?
There are several global initiatives by Deloitte to extensively leverage the power of AI on audits in a variety of areas. The following areas are worth noting;
Data Analytics
Reviewing contracts and extracting key info
Audit information extraction from source documents
Smarter review of bank statements and reconciliations
Do you think the use of AI in audit can take away a lot of jobs? If yes, what kind of jobs?
AI can help auditors in further automating repetitive tasks and improving the coverage and the quality of audits and it will not take away jobs. It will help auditors better utilise their time to do a smarter review of the output, especially when carrying out mundane tasks.
However, to make this happen, there is a compelling need for talent transformation at the grass
root level.
Do you think AI could allow smaller audit firms to compete with larger firms like yours?
Investments and skills required for leveraging AI is critical and this would certainly help in enhancing the quality of audits significantly. There is a need for a fine blend of audit skills and AI skills to get the best out of the AI.
