In the modern landscape of digital transformation, Artificial Intelligence (AI) applications are rapidly emerging in diverse industries, promising efficiency, precision, and automation.
The field of auditing is no exception. The up-and-coming AI audit programmes promise to process vast amounts of data faster than any human and identify discrepancies or irregularities with unparalleled accuracy.
However, while AI brings immense potential to the auditing profession, human audit specialists remain a critical component of a comprehensive audit process.
Let’s explore why humans hold an edge and how the integration of both AI and human expertise can redefine the future of auditing:
- Contextual Understanding and Judgment:
One of the most significant advantages human auditors have over AI is their ability to understand context.
Auditing isn’t just about numbers or transaction patterns; it’s about understanding the nuances of a business, its operations, and its environment.
Human auditors can interpret qualitative data, grasp the context in which transactions occur, and provide expert judgment based on years of experience. While AI can identify patterns, humans excel at understanding the why behind those patterns.
- Emotional Intelligence and Relationship Building:
Auditing often involves interacting with various stakeholders – from owners, directors and CEOs to operational staff. Building trust, understanding concerns, and eliciting crucial information requires interpersonal skills and emotional intelligence – qualities that AI lacks.
Human auditors can read between the lines, sense apprehensions, and foster trustful relationships which can be pivotal in acquiring transparent and honest insights.
- Ethical Considerations:
AI operates based on algorithms and data, but ethical considerations in auditing often require human discernment.
Decisions about fairness, professional scepticism, and ethical behaviour cannot be codified easily into algorithms.
Human auditors bring a moral compass to the table, ensuring that audits not only follow the letter of the law but also its spirit.
- Flexibility and Adaptability:
The business world is ever-evolving. When unprecedented scenarios arise, AI tools, if not trained on such data, may falter.
Human auditors, on the other hand, can adapt, think on their feet, and address unique challenges head-on, leveraging their experience and knowledge.
Combining AI and human expertise:
Instead of viewing AI audit programs as replacements for human auditors, it’s more productive to see them as complementary forces.
Here’s how the two can work in tandem for enhanced audit insights:
- Data processing and preliminary analysis: AI can quickly sift through massive datasets, identifying potential red flags or patterns that require further investigation. This can streamline the preliminary stages of an audit, allowing human auditors to focus on in-depth analysis.
- Real-time monitoring: With AI, continuous audit processes can become a reality. Instead of periodic checks, AI can monitor transactions in real time, flagging discrepancies immediately. Human auditors can then delve deeper into these issues, ensuring timely resolution.
- Predictive analysis: AI’s predictive capabilities can forecast potential risks or areas of concern, which human auditors can further validate, allowing for proactive risk management.
- Collaborative decision-making: By integrating AI’s data-driven insights with human judgment and contextual understanding, the decision-making process in audits becomes more robust and holistic.
While AI audit programs introduce a revolutionary approach to data processing and pattern recognition, the nuanced, contextual, and ethical dimensions of auditing remain firmly in the domain of human expertise.
By harmonising the strengths of both AI and human auditors, the auditing profession stands to benefit immensely, offering more comprehensive, insightful, and forward-looking audit reports to stakeholders.
Want to find out how we bring a human touch to the audit process, please contact your Seymour Taylor representative today or email enquiries@stca.co.uk or call 01494 552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 11 August 2023.