How Automation and Artificial Intelligence are Changing the Audit

Artificial Intelligence

Before we answer Artificial Intelligence let’s look at these terms individually. What do you understand by the term Artificial, well it can be anything that is made by humans things that are not natural? And what do you understand by Intelligence is the ability to understand think and learn. So what do we get when we combine these two together. Artificial Intelligence is a broad area of computer science that makes machines seem like they have human Intelligence.

Automation And Artificial Intelligence
Automation And Artificial Intelligence

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Goal of AI

The goal of AI is to mimic the human brain and create systems that can function intelligently and independently. They say that the age of AI is here, but then you might be wondering why don’t you see flying cars or robotic maids bringing you lunch. Why doesn’t your life look more like the Jetsons? Well for starters that’s a cartoon and when it comes to AI a robot is nothing more than a shell concealing what’s actually used to power the technology.

AI can manifest itself in many different ways. If you have ever asked Alexa to order your food or browse Netflix movie suggestions you are actually interacting with AI without realizing it and that’s kind of the point. AI is designed so you do not realize that there is a machine calling the shots. In the near future AI is expected to become a little less Artificial and a lot more Intelligent. As AI becomes more intelligent it will obviously take on the role of an intelligent worker.

While most of the repetitive and largely time-oriented tasks can be automated using AI. We will still need human experts who can build and maintain these synthetic BOTS and work on the strategic and creative aspects of a job. So in conclusion AI is a boon that can help optimize any job this means that as always it’s not AI versus humans rather it is a combination of humans and AI versus the actual problem statement.

How Automation and Artificial Intelligence are Changing the Audit

How do you analyze situations that are constantly in flux? And how do you detect patterns that are too complex to find? The world of AI has opened up new horizons everywhere, including auditing. As an auditor, you don’t need to understand all the intricacies of a technology to use it. But you do have to understand its potential and be ready to reap the benefits for your firm and for your clients.

How do you get into the AI game?

First, learn how to participate. Find out what Automation and Artificial Intelligence tools are in the marketplace and become familiar with their capabilities. And explore resources such as emerging tech news feeds, publications, videos, and events you can tap into.

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Make Connections

Look within your own organization to discover who the Automation and Artificial Intelligence leaders are or if you are the first join an external networking group. Ask them what tools they are using and for any advice on getting started in this area. It won’t take long before you start recognizing opportunities for Automation that you may have previously overlooked.

But to Automate any process you need digital data. To make sure you’re well-positioned to maximize Automation, start with obtaining evidence from clients in an electronic format. A common area to start is to automate processes that are consistent and repetitive, such as copying and pasting information or working across multiple data sources.

Imagine the time savings of a bot rebuilding the financial statements from underlying data, allowing the auditor to focus on identifying errors and miss classifications. Lead sheets and variance analysis would be available at the push of a button with pre-designed analytics on journal entries, outstanding receivables, aged inventory and investment valuations.

This would in turn shift your time from data collection and manipulation to higher-order analysis and evaluation. Or you can take Intelligent Automation to the next level and leverage AI’s pattern recognition capabilities to detect anomalies that auditors can then investigate. Complex patterns and correlated impacts can be detected and analyzed through the use of AI far more accurately and efficiently than ever before.

For example, AI could be used to analyze uncollected debt at the customer level to challenge management’s prediction of collection risk. Or AI could be used to predict the valuation of an investment, including privately-held investments that are more difficult to price like real estate properties or private equity.

Finally, never stop innovating. After completing an Automation or Artificial Intelligence project take a step back, capture your lessons learned and then move on to the next opportunity, of which there will be many, with Automation and AI’s use case expanding rapidly. The world of AI is growing. What role will you play?

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