CPA Australia CEO discusses role of AI in auditing

At the Every Auditor Proud Day event, CPA Australia CEO Chris Freeland discussed the role of artificial intelligence (AI) in auditing.

With AI being utilised for financial tasks, auditors are adapting their roles to provide assurance over these new technologies.

The integration of AI in business processes such as annual report preparation and compliance management has not replaced the need for auditors.

Instead, it has broadened their responsibilities, Freeland noted.

Auditors now evaluate not only the financial data but also the underlying algorithms and data processes that generate financial information.

He said that the adoption of AI in auditing enhances the ability to analyse vast amounts of transactions quickly, identifying potential discrepancies that might have been missed.

AI also enables auditors to examine complete datasets rather than relying on sample-based testing.

Despite the advancements in AI, the human element of auditing remains crucial.

Auditors apply their professional scepticism to question the assumptions and challenge the conclusions drawn by AI systems.

They bring an understanding of context and ethical considerations that algorithms alone cannot provide.

Freeland pointed out that AI’s effectiveness depends on the quality of the data it is trained on.

According to him, auditors play a critical role in ensuring fairness by examining how AI systems are created and implemented.

As businesses are called upon to report on a wider range of metrics, including sustainability and climate risks, auditors are also verifying the systems and algorithms that analyse these disclosures.

This expansion of duties necessitates that auditors enhance their expertise in technology and data science while retaining their independence and objectivity.

He concluded that the essence of their work remains rooted in fostering trust.

Recently, CPA Australia expressed its support for Treasurer Jim Chalmers’ directive to the Board of Taxation, which aims to identify methods for reducing the compliance burden on the country’s business tax system. 