AI promises more efficiency but won’t replace auditors\
October 9, 2024
More than half of finance leaders believe technology will improve audit quality, but the human element is irreplaceable.
The 2024 BDO Audit Innovation Survey found that 54% of leaders expect their audit firm to use artificial intelligence (AI) and other advanced technologies to enhance the audit experience. Moreover, before even engaging with an auditor, 64% said they seek a firm that uses AI.
On the other hand, 56% of finance leaders look for a proven track record when selecting an external auditor and 49% want industry knowledge.
BDO surveyed 200 senior finance leaders at U.S. private and publicly held companies with annual revenues between $250 million and $3 billion.
Other anticipated benefits provided by technology, according to the survey: more efficient processes and collaboration (52%), increased transparency into the audit process (46%), and a better picture of the audit risk landscape.
Data governance falls behind among internal finance and accounting teams. More than two-thirds (69%) of finance leaders said establishing data governance and internal data management is a barrier to a smooth audit experience, followed by having the proper people and resources (60%) and compiling and preparing audit evidence (56%).
Finance leaders said the chief technologies they plan to use over the next 12 months are extract, transform, and load software (45%), virtual or augmented reality (41%), and robotic process automation (38%).
But implementing new tools while data maturity is lacking could be problematic, BDO said, because these technologies necessitate strong data governance to yield return on investment and meaningful results.
Finance and accounting teams seek new strategies amid talent shortage. Organizations are considering various strategies to address the talent shortage over the next 12 months: recruiting experienced accountants (68%), adopting advanced tech like AI (61%), and hiring nonaccountants for responsibilities that have historically been performed by accountants (50%).
Finance and accounting teams are currently applying AI in various ways, led by automated data entry (56%), predictive analytics (54%), and expense management (52%).
By leaning on tech efficiencies and deploying AI, according to BDO, finance leaders will have more time to focus on more strategic responsibilities that require critical thinking and other human endeavors.
[Journal of Accountancy]
