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AI's Emergence in the Audit
It can be a challenge staying current on the latest technologies. For instance, what do you know about artificial intelligence (AI)? In this blog we look at some of the critical questions about AI in the audit world.
By Bruce Lane and Rick Kes
It can be a challenge staying current on the latest technologies. For instance, what do you know about artificial intelligence (AI) and how it is transforming the audit? In this preview of our upcoming session at PICPA's virtual-only 2020 Accounting and Auditing Conference on Dec. 10-11, we look at some of the critical questions about AI in the audit world.
Can AI in Excel improve efficiency?
Microsoft Excel’s Ideas (formerly known as Insights) provides users with a better understanding of their data through natural language queries that allow the asking of questions without having to write complicated formulas. In addition, Ideas analyzes and provides high-level visual summaries, trends, and patterns.
Other capabilities in Microsoft Excel can help practitioners with various tasks:
- Data Types provides up-to-date information regarding stocks and geography.
- A mobile version of Excel allows cameras to create a table.
- Dynamic Arrays provides the capability to see all returned values immediately without having to copy a formula or define the output area.
- Although not an Excel function Benford's Law, can be useful in identifying anomalies in a database. We will demonstrate Excel functions that can help auditors visualize where anomalies exist and then adjust audit procedures to investigate.
As AI enters the financial systems that clients use, what audit issues may arise?
Cash flow forecasting tools that incorporate AI and machine learning (ML) will impact valuations in areas such as reserves for doubtful accounts. Previously, this may have been based solely on historical rates; now, our clients have access to tools that are much more predictive using complex algorithms. We will discuss how AI and ML tools work and what auditors need to consider when evaluating these reserves.
Are you using available remote technologies?
Augmented reality devices such as HoloLens have been used for two specific work areas: inventory observation and component auditor workpaper reviews. The main return on investment considerations for those workstreams are related to the reduction in travel time and direct expenses.
Microsoft Teams is also being heavily used by audit teams to do the following:
- Document and record meetings
- Launch web apps
- File collaboration
- Set up virtual audit rooms and office hours
We'll go into greater depth on this issue at PICPA's Accounting and Auditing Conference on Dec. 10-11.
Bruce Lane is a Dynamics 365 finance and operations/commerce technical specialist for the Microsoft Corporation US Team. He can be reached at Lane.Bruce@microsoft.com.
Rick Kes is a partner and health care senior analyst with RSM US LLP. He can be reached at Richard.Kes@rsmus.com.
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