{"id":316,"date":"2025-11-20T14:35:45","date_gmt":"2025-11-20T14:35:45","guid":{"rendered":"https:\/\/xplain-r.com\/?page_id=316"},"modified":"2025-11-28T15:02:17","modified_gmt":"2025-11-28T15:02:17","slug":"the-future-of-audit","status":"publish","type":"page","link":"https:\/\/xplain-r.com\/fr\/useful\/the-future-of-audit\/","title":{"rendered":"The future of Audit"},"content":{"rendered":"<p class=\"wp-block-paragraph\"><em>AI and the Next Evolution of Auditing: Enhancing Accuracy, Efficiency, and Insight<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Note: Further reading and sources later on page<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Paper on Internal Audit &amp; Risk Commentary \u2014 October 2024<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Artificial intelligence is reshaping both external and internal auditing by enhancing accuracy, efficiency, and insight. Major audit firms and academic researchers are accelerating innovation in the field, and AI\u2019s capabilities are now accessible to practitioners across all industries. The technology provides unprecedented analytical capacity, enabling auditors to deepen their examination of data and strengthen assurance without proportional increases in cost or time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This paper draws on professional audit experience and wider research, including ongoing work with international policy bodies.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Areas of Impact<\/strong><\/h4>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>External Audit<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">AI improves audit quality by:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>automating data ingestion and analysis,<\/li>\n\n\n\n<li>identifying anomalies and irregularities,<\/li>\n\n\n\n<li>supporting judgement formation with predictive analytics,<\/li>\n\n\n\n<li>creating transparent audit trails.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Auditors can now investigate significantly more information, in greater depth, with greater consistency.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Internal Audit<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">AI supports internal auditors through:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>continuous monitoring and real-time risk visibility,<\/li>\n\n\n\n<li>data-driven audit planning,<\/li>\n\n\n\n<li>intelligent document review,<\/li>\n\n\n\n<li>benchmarking across units or periods,<\/li>\n\n\n\n<li>automated workpaper generation.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This shifts internal audit towards more strategic, forward-looking activity and clarity over operational performance.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Continuous Operational Improvement<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">AI enables:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>real-time performance analysis,<\/li>\n\n\n\n<li>process optimisation,<\/li>\n\n\n\n<li>predictive maintenance and incident forecasting,<\/li>\n\n\n\n<li>automated compliance checks,<\/li>\n\n\n\n<li>customer or stakeholder feedback analysis.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This improves agility, speeds remediation, and drives reliable operational discipline.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Challenges and Ethical Considerations<\/strong><\/h4>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Programmatic Limitations<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">AI can support complex judgement but may remain inconsistent in performing multi-step processes without appropriate controls and structure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Data Quality and Bias<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">High-quality data is essential. Both AI and humans introduce biases; these need explicit mitigation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Security and Confidentiality<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">While more manageable than in early AI generations, data protection and access control remain essential for trust.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Transparency and Accountability<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">AI must be explainable, and human oversight must be properly balanced to avoid overreliance or blind trust.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Regulatory Compliance<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Organisations must keep pace with evolving regulation and emerging governance standards for AI use.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Future Directions<\/strong><\/h4>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>1. AI Audit Standards &amp; Explainability<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Develop robust internal standards for AI-supported audit work, including transparent models, explainable outputs, and consistent traceability.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>2. Improved AI\u2013Human Collaboration<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Define how technology and professional judgement interact, whether individually or in mixed teams. This supports careful management of cognitive load and prevents analysis fatigue.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>3. Training &amp; Education<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Provide ongoing awareness, capability-building and scenario-based training to help teams understand AI behaviours, limitations, and safe-use boundaries.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>A Strategic Framework: Turning Internal Learning into Customer and Organisational Value<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">A structured approach enables organisations to strengthen internal capabilities while building a cycle of continuous learning that benefits the wider business and its stakeholders.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>1. Data Collection and Insight Generation<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Implement comprehensive analytics across logs, audit outputs, operational systems, and documentation.<\/li>\n\n\n\n<li>Create a knowledge engine that learns from internal patterns, issues, and effective solutions.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>2. Continuous Feedback Loops<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Capture structured feedback from users, auditors, and operational teams.<\/li>\n\n\n\n<li>Establish review panels to interpret findings, extract lessons learned, and propose improvements.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>3. Adaptive AI Models<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Use real-world data to refine AI models so they become more predictive and aligned with genuine operating conditions.<\/li>\n\n\n\n<li>Apply structured \u201cmethod-statement learning\u201d to tune AI behaviour based on accumulated performance and feedback.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>4. Customer-Centric Solution Enhancements<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Develop configurable features that support diverse industries and regulatory requirements.<\/li>\n\n\n\n<li>Introduce predictive tools that detect potential issues early and suggest proactive mitigation strategies.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>5. Transparent and Explainable AI<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ensure AI methods provide clear, comprehensible reasoning to support assurance and trust.<\/li>\n\n\n\n<li>Educate users on how AI models learn and evolve.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>6. Partnerships and Collaborative Development<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Work with customers, partners, regulators, and standards bodies to shape emerging industry norms.<\/li>\n\n\n\n<li>Contribute operational insights to strengthen sector-wide governance.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>7. Ethical and Responsible AI Practices<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Conduct periodic ethical audits of algorithms and learning processes.<\/li>\n\n\n\n<li>Continuously review compliance with data protection and regulatory requirements.<\/li>\n\n\n\n<li>Ensure fairness, integrity, and accountability in every AI-supported activity.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<section>\n  <h3>AI &amp; The Evolution of Auditing &mdash; Sources &amp; Further Reading<\/h3>\n\n  <p>\n    This curated list brings together industry, academic, and governance perspectives on how AI is reshaping internal and external audit, assurance, and algorithmic oversight.\n  <\/p>\n\n  <h3>1. Big Four &amp; Industry Leaders<\/h3>\n  <ul>\n    <li>\n      <strong>EY &mdash; AI Assurance &amp; Audit Technology<\/strong><br>\n      <a href=\"https:\/\/www.ey.com\/en_gl\/newsroom\/2024\/05\/ey-asurance-releases-new-technology-capabilities-strengthening-confidence-and-trust\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.ey.com\/en_gl\/newsroom\/2024\/05\/ey-asurance-releases-new-technology-capabilities-strengthening-confidence-and-trust\n      <\/a>\n    <\/li>\n    <li>\n      <strong>EY &mdash; How AI Helps Auditors Detect Fraud<\/strong><br>\n      <a href=\"https:\/\/www.ey.com\/en_us\/insights\/assurance\/how-an-ai-application-can-help-auditors-detect-fraud\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.ey.com\/en_us\/insights\/assurance\/how-an-ai-application-can-help-auditors-detect-fraud\n      <\/a>\n    <\/li>\n    <li>\n      <strong>EY &mdash; Auditing with Human Insight and AI<\/strong><br>\n      <a href=\"https:\/\/www.ey.com\/en_ch\/ai\/what-happens-when-you-audit-with-human-insight-and-artificial-intelligence\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.ey.com\/en_ch\/ai\/what-happens-when-you-audit-with-human-insight-and-artificial-intelligence\n      <\/a>\n    <\/li>\n    <li>\n      <strong>EY &mdash; AI Platform Investment<\/strong><br>\n      <a href=\"https:\/\/www.ey.com\/en_gl\/newsroom\/2023\/09\/ey-announces-launch-of-artificial-intelligence-platform-ey-ai-following-us-1-4b-investment\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.ey.com\/en_gl\/newsroom\/2023\/09\/ey-announces-launch-of-artificial-intelligence-platform-ey-ai-following-us-1-4b-investment\n      <\/a>\n    <\/li>\n    <li>\n      <strong>KPMG &mdash; Smart Audit and AI<\/strong><br>\n      <a href=\"https:\/\/kpmg.com\/us\/en\/articles\/2023\/smart-audit.html\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/kpmg.com\/us\/en\/articles\/2023\/smart-audit.html\n      <\/a>\n    <\/li>\n  <\/ul>\n\n  <h3>2. Academic and Peer-Reviewed Research<\/h3>\n  <ul>\n    <li>\n      <strong>AI in Auditing: Opportunities and Risks (Springer)<\/strong><br>\n      <a href=\"https:\/\/link.springer.com\/article\/10.1007\/s44206-023-00074-y\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/link.springer.com\/article\/10.1007\/s44206-023-00074-y\n      <\/a>\n    <\/li>\n    <li>\n      <strong>Digital Transformation of Audit Functions (Springer)<\/strong><br>\n      <a href=\"https:\/\/link.springer.com\/article\/10.1007\/s10796-024-10508-8\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/link.springer.com\/article\/10.1007\/s10796-024-10508-8\n      <\/a>\n    <\/li>\n    <li>\n      <strong>AI Governance, Audit &amp; Trustworthiness (MDPI)<\/strong><br>\n      <a href=\"https:\/\/www.mdpi.com\/2076-3387\/14\/10\/238\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.mdpi.com\/2076-3387\/14\/10\/238\n      <\/a>\n    <\/li>\n    <li>\n      <strong>AI-Driven Audit Research (SSRN)<\/strong><br>\n      <a href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=4887799\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=4887799\n      <\/a>\n    <\/li>\n    <li>\n      <strong>Algorithmic Auditing &amp; Controls (SSRN)<\/strong><br>\n      <a href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=4318689\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=4318689\n      <\/a>\n    <\/li>\n  <\/ul>\n\n  <h3>3. AI Oversight, Risk and Governance<\/h3>\n  <ul>\n    <li>\n      <strong>Stanford HAI &mdash; Using Algorithm Audits to Understand AI<\/strong><br>\n      <a href=\"https:\/\/hai.stanford.edu\/sites\/default\/files\/2022-10\/HAI%20Policy%20Brief%20-%20Using%20Algorithm%20Audits%20to%20Understand%20AI.pdf\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/hai.stanford.edu\/&#8230;\/Using%20Algorithm%20Audits%20to%20Understand%20AI.pdf\n      <\/a>\n    <\/li>\n    <li>\n      <strong>OECD &mdash; Algorithm Auditing Research Overview<\/strong><br>\n      <a href=\"https:\/\/oecd.ai\/en\/wonk\/algorithm-auditing-research-overview\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/oecd.ai\/en\/wonk\/algorithm-auditing-research-overview\n      <\/a>\n    <\/li>\n    <li>\n      <strong>Evaluation of Large Models for Audit-Relevant Tasks (arXiv)<\/strong><br>\n      <a href=\"https:\/\/arxiv.org\/abs\/2406.14243\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/arxiv.org\/abs\/2406.14243\n      <\/a>\n    <\/li>\n    <li>\n      <strong>LLM Alignment, Risk and Reliability (arXiv)<\/strong><br>\n      <a href=\"https:\/\/arxiv.org\/abs\/2407.06235\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/arxiv.org\/abs\/2407.06235\n      <\/a>\n    <\/li>\n  <\/ul>\n\n  <h3>4. Regulators &amp; Professional Bodies<\/h3>\n  <ul>\n    <li>\n      <strong>IAASB &mdash; Technology and Audit Evidence<\/strong><br>\n      <a href=\"https:\/\/www.iaasb.org\/focus-areas\/technology\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.iaasb.org\/focus-areas\/technology\n      <\/a>\n    <\/li>\n    <li>\n      <strong>FRC (UK) &mdash; Audit Quality Review and Technology<\/strong><br>\n      <a href=\"https:\/\/www.frc.org.uk\/auditors\/audit-quality-review\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.frc.org.uk\/auditors\/audit-quality-review\n      <\/a>\n    <\/li>\n    <li>\n      <strong>PCAOB &mdash; Technology and Emerging Risks in Audit<\/strong><br>\n      <a href=\"https:\/\/pcaobus.org\/oversight\/standards\/research-and-standard-setting\/technology\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/pcaobus.org\/oversight\/standards\/research-and-standard-setting\/technology\n      <\/a>\n    <\/li>\n    <li>\n      <strong>NIST &mdash; AI Risk Management Framework<\/strong><br>\n      <a href=\"https:\/\/www.nist.gov\/itl\/ai-risk-management-framework\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.nist.gov\/itl\/ai-risk-management-framework\n      <\/a>\n    <\/li>\n  <\/ul>\n\n  <h3>5. Industry &amp; Media Perspectives<\/h3>\n  <ul>\n    <li>\n      <strong>Accountancy Age &mdash; AI Fraud Detection in Audit<\/strong><br>\n      <a href=\"https:\/\/www.accountancyage.com\/2023\/12\/05\/eys-innovative-use-of-ai-in-detecting-audit-frauds-sparks-debate\/\" target=\"_blank\" rel=\"noopener\">\n        <blockquote class=\"wp-embedded-content\" data-secret=\"yL582vYTnz\"><a href=\"https:\/\/accountancyage.com\/2023\/12\/05\/eys-innovative-use-of-ai-in-detecting-audit-frauds-sparks-debate\/\">EY&#8217;s innovative use of AI in detecting audit frauds sparks debate<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"&#8220;EY&#8217;s innovative use of AI in detecting audit frauds sparks debate&#8221; &#8212; Accountancy Age\" src=\"https:\/\/accountancyage.com\/2023\/12\/05\/eys-innovative-use-of-ai-in-detecting-audit-frauds-sparks-debate\/embed\/#?secret=b5GyeA9CUt#?secret=yL582vYTnz\" data-secret=\"yL582vYTnz\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n      <\/a>\n    <\/li>\n    <li>\n      <strong>CFO Brew &mdash; How and Why EY Uses AI in Audit<\/strong><br>\n      <a href=\"https:\/\/www.cfobrew.com\/stories\/2023\/10\/23\/how-and-why-ey-uses-ai-audit-process\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.cfobrew.com\/stories\/2023\/10\/23\/how-and-why-ey-uses-ai-audit-process\n      <\/a>\n    <\/li>\n    <li>\n      <strong>The Australian &mdash; AI Adoption in Financial Processes<\/strong><br>\n      <a href=\"https:\/\/www.theaustralian.com.au\/business\/financial-services\/most-australian-companies-now-using-ai-for-financial-processes\/news-story\/6d589b08a1ab7373bc7964ac486a2b7e\" target=\"_blank\" rel=\"noopener\">\n        https:\/\/www.theaustralian.com.au\/&#8230;\/most-australian-companies-now-using-ai-for-financial-processes\n      <\/a>\n    <\/li>\n  <\/ul>\n<\/section>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>","protected":false},"excerpt":{"rendered":"<p>AI and the Next Evolution of Auditing: Enhancing Accuracy, Efficiency, and Insight Note: Further reading and sources later on page Paper on Internal Audit &amp; Risk Commentary \u2014 October 2024 Artificial intelligence is reshaping both external and internal auditing by enhancing accuracy, efficiency, and insight. Major audit firms and academic researchers are accelerating innovation in [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":400,"menu_order":5,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-316","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/pages\/316","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/comments?post=316"}],"version-history":[{"count":6,"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/pages\/316\/revisions"}],"predecessor-version":[{"id":322,"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/pages\/316\/revisions\/322"}],"up":[{"embeddable":true,"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/pages\/400"}],"wp:attachment":[{"href":"https:\/\/xplain-r.com\/fr\/wp-json\/wp\/v2\/media?parent=316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}