Auditors are most looking for technology to help them with the audit execution and fieldwork phases, which is also where AI is most likely to be used.
That's one of the findings of a recent survey of audit professionals in the U.S., U.K., and Canada. While auditors were considering new software and digital tools at all stages of the audit engagement, the execution/field work stage was the highest priority, according to 46% of respondents. The planning stage came in second at 37%, followed by the pre-audit stage at 29% and the reporting/wrap-up stage at 24%. However, 32% of respondents said they weren't considering adding additional software or digital tools at all (this was most pronounced in the U.K., where 45% of auditors said this).
In terms of what auditors specifically want new technologies to do during the execution/field examination phase, responses tend to revolve around different types of automation, which is also consistent with the main use cases for artificial intelligence cited by auditors, whether generative or not. Auditors said that AI systems can “improve the speed and ease with which audits are performed by automating tasks such as data processing, data management and data extraction,” as well as “automate audit testing and basic audit procedures and use AI systems to perform compliance checks,” and “automate sample selection, test entire populations and review all relevant client documentation with AI systems.”
Andrey Popov/Andrey Popov – stock.adobe.com
Apart from automation, the auditors also stated that a major benefit of applying new technologies to field operations is that data analytics can be used to process large amounts of information, extract all potential insights, and summarize all data anomalies. In fact, data extraction and entry are of This was the most commonly cited use case for AI among auditors, cited by 57% of respondents.
In terms of planning, auditors appear to primarily want technology for risk assessment and management to be central to their audit plans. They want AI systems to better identify relevant trends, spot anomalies, and fully assess high-risk areas, and do so in a streamlined, automated manner, leading to more consistent predictive analysis and more detailed risk assessments.
Similarly, auditors want to use technology to respond in real time to changes in audit and accounting standards, and regulatory issues that may impact an audit, including regulatory changes that affect a client's business practices or changes in standards that affect a client's accounting treatment.
Technology priorities during the pre-engagement phase primarily concerned client integration matters, including collecting audit-related data and other key information, handling administrative tasks, and assisting with data entry and analysis.
“Currently, this can be a cumbersome process involving multiple phone calls, email exchanges, or face-to-face meetings. Using an AI interface, audit professionals can onboard clients at their own pace and time, without the need for staff intermediation,” the report said.
For the wrap-up part of the audit engagement, audit firms see technology as a means to make post-audit analysis more consistent, informative, and timely. Audit firms want to use AI to help them produce well-designed, relevant, and accurate summary reports for clients at the end of the audit. For example, AI can check preliminary drafts for accuracy and consistency and ensure that stated conclusions are supported by evidence. Auditors are also interested in AI's potential to enhance or automate disclosures in financial statements and related notes, as well as provide new visual tools to better understand the data.
assignment
A specific audit firm do not have When it comes to using technology in this way, talent issues were overwhelmingly cited as the main obstacle: Attracting and hiring skilled professionals was cited by 58% of auditors, followed by retaining staff at 41%. “What makes this even more challenging is that many audit firms are not simply trying to fill seats. They need a specific type of professional – someone with significant technical knowledge and the quick thinking to deal with unexpected situations,” the report states.
Specifically, companies are looking for auditors with critical thinking and problem-solving skills, as well as technical audit and regulatory compliance knowledge.
Companies also feared they wouldn't have the time to adopt new technologies while maintaining service levels to customers, and nearly a quarter of respondents cited pricing pressures as a major challenge.
“Thus, if a company finds its pricing structure threatened by aggressive competitors and overall customer revenue stagnating or declining, this could have a domino effect on investment decisions. At this time, dedicating a significant portion of a company's budget to implementing new technology may be unpalatable to struggling company management,” the report said.
The Thomson Reuters survey included 180 audit professionals who completed a 10-minute questionnaire conducted between February and March of this year. Participants were screened to ensure they were decision makers or influencers involved in purchasing decisions at their audit firms, were involved in conducting or managing audit engagements for clients, and used digital tools to conduct and manage audit-related engagements. All 100 U.S. respondents were from firms with 30 or more employees. Respondents from other regions were split between medium and large firms, including Canada (30 respondents, roughly equal numbers) and the UK (50 respondents, 30 of which were large firms).
