PwC turns to AI for audit transformation
May 15, 2023
As generative AI continues to develop swiftly, PwC is betting big on its potential for transformation.
Big Four accounting firm PricewaterhouseCoopers is betting big on generative AI as a transformative technology, with the company investing $1 billion over the next three years into this technology, the company announced in late April.
The firm demonstrated the key role AI and other emerging technologies will play in its business during its technology showcase which took place May 9 in New York, including its geospatial climate intelligence tool —which helps assess climate risk — its model edge product, a cloud-based platform for risk management, as well as its soon to come predictive analytics tool.
PwC will also aim to tap generative AI and other emerging technologies to innovate key areas including audits. PwC is investing an additional $1 billion into its auditing services, an investment “at scale that helps us to achieve transformation in the way we deliver our audit work and the technology that underpins the delivery” of that work, Wes Bricker, vice chair and U.S. trust solutions leader for PwC said in an interview.
The new global audit technology ecosystem will help the firm “standardize, simplify, centralize and automate our audit work,” a PwC spokesperson said via email. The ecosystem will be rolled out to PwC’s global network over the next several years.
Generative AI, the development of which is a major focus for the firm, will also play a role in the company’s coming predictive analytics tool, which it is in the process of piloting. Underpinned by AI, the tool will help PwC “support our audit opinions in a particular area,” Bricker said.
AI and next-gen audit
Companies are racing to ensure they don’t lag behind when it comes to AI: alongside PwC, fellow Big Four firm Deloitte earmarked $1.4 billion for its Project 120 initiative aimed at developing “critical tech and leadership skills” for its employees, the company said in December.
KPMG, meanwhile, announced a partnership with Ottawa, Canada-based technology provider MindBridge, aimed at bringing the firm’s machine learning tech into its existing digital audit platform KPMG Clara.
“Generative AI enables us to take an existing technique and achieve its objectives with much greater technology,” Bricker said of the technology’s potential. While techniques like predictive analytics in auditing have existed for several years, the breadth of data that can be harnessed and utilized by bringing generative AI into the mix can be transformative for the company’s auditing services, for example.
“If you think about the revenue recorded, that incorporates market interest rates, we can then take market interest rate curves, which are publicly published and compare that to interest revenue that’s recorded on financial contracts,” Bricker said. “The availability of market-based data is expanding and within our audits, we will harness the power of that data.”
The human element
While the Big Four, together with companies such as Oracle, Microsoft and Google, are swiftly taking steps to ensure they are not left behind in the AI race, most companies are looking to the technology as a tool instead of a replacement for human employees.
KPMG, for example, is bullish on the importance of the human touch in this space, Sebastian Stöckle, global head of audit innovation told CFO Dive in a previous interview, noting these processes always take place with “a human-machine interaction,” he said, “It’s never a ‘leave the machine alone’ type of scenario.”
PwC is among those moving to ensure their employees can keep pace with AI, with the company aiming to offer “human-led, tech-enabled solutions,” the company said. However, it can be tricky to upskill employees on a technology that is developing at a rapid pace — with generative AI, there are “new professions that did not exist six months ago,” Mohamed Kande, U.S. consulting solutions co-leader and global advisory leader pointed out last week during a Q&A at the company’s tech showcase.
Kande pointed to roles such as prompt engineer, a position so new that universities or programs are yet to teach the skills needed for it, for example.
“We will have to develop our own prompt engineers, taking some of our data engineers, data scientists, and make sure we give them the training…to make sure our technical people can be more specialized when it comes to generative AI,” he said.
Starting with the techniques employees already know can help to enable the learning of these new skills, Bricker said, adding that PwC auditors “know the techniques of using predictive analytics in the context of an audit,” for example.
“We won’t leave our people behind on AI,” he said. “So we’ve made a commitment to train all of our people on generative AI. That then enables our people to combine the two with greater capacity, because they’re starting with the domain of knowledge they know. They’re adding to it.”