The auditor is no longer alone. There’s another intelligence in the room

Audits have traditionally meant auditors spending hours sifting through ledgers, invoices, contracts and financial records. Artificial intelligence (AI) is changing that equation, helping auditors analyse large volumes of data, flag unusual transactions and identify potential compliance and fraud risks.

This is especially important in India, where the regulatory landscape is vast. Businesses today have to navigate more than 1,530 Acts and Rules and comply with over 69,000 statutory obligations, covering everything from licences and filings to inspections, disclosures and operational requirements, according to a TeamLease RegTech report.

Rising use of AI in audits

AI is moving beyond experimentation in the audit and accounting industry, with firms increasingly using the technology for data analysis, documentation and other routine audit processes.

According to IDC’s ‘The Future of Audit and Accounting in the AI Era’ report, which surveyed more than 1,000 audit and accounting professionals globally, 66% of respondents said AI is already embedded in their firm’s strategy, being widely used in select functions or being tested through pilot projects. More than half (53%) also agreed or strongly agreed that AI tools can improve audit quality.

“The biggest benefit of using AI in audit and compliance is a more efficient, less disruptive, and more insight-driven process. The real value is not only in saving time, but in enabling earlier action, stronger controls, better documentation, and faster closure,” Sachin Mohe, Partner, Audit Technology Specialist, Deloitte India, told ET Online.

Among the specific ways AI can be used in audit, one application is transaction analysis. Once a ledger or transaction dump is uploaded with appropriate instructions, AI-based audit tools can help flag duplicate entries, unusual trends, missing approvals and transactions that fall outside predefined criteria.

Using AI in audit and compliance helps automate repeat audit procedures such as big data analytics with value impact, summarising gaps in audit evidences/ source documents, identifying duplicate transactions, and highlighting exceptions in terms of fraud risk scenarios with the help of AI agents,” Tarun Kher, Partner, Risk Advisory, Business Advisory at BDO India, said.

How is AI being incorporated in audits?

As AI moves deeper into the audit process, large firms are building AI tools into their cloud-based platforms.

“Audit firms are incorporating agentic and AI-enabled capabilities within their audit platforms to support specific audit and compliance activities, including risk sensing, evidence retrieval, document analysis, technical accounting research, audit documentation, financial statement validation and the analysis of large datasets for items of audit interest,” said Samir Shah, Audit Leader, Deloitte Haskins & Sells LLP.

Source: Economic Times