Travis McGee, a Senior Audit Manager for a Big Four Audit, Consulting, Tax and Data Analytics organization, has just spent
Travis McGee, a Senior Audit Manager for a Big Four Audit, Consulting, Tax and Data Analytics organization, has just spent the last year helping the firm rollout its new Artificial Intelligence (AI)-based audit infrastructure. Travis is considered one of the most knowledgeable people in the firm surrounding the proper implementation of their new offering, Pandora. There are incredibly high hopes that Pandora will improve overall audit quality and create efficiencies in the audit practice where thin operating margins are the norm. The firm has invested over $200 million into Pandora and Travis is one of a group of senior managers who have been trained to oversee first time implementations of Pandora for the firm’s audit clients.
This morning, Travis got a call from Sue, another manager who he had previously worked with and respected, who expressed concerns over statements an engagement partner she was currently working with was making about Pandora. Sue explained that she was in the process of planning the audit of a Fortune 100 client and that during a planning meeting with the engagement team, the engagement partner had stated that the firm needed to cut the budget for the audit by 20 percent or risk losing the client. The partner stated that with the rollout of Pandora, the firm should be able to substantially reduce the work needing to be done in all phases of the audit. The partner evidently spoke of Pandora as having superhuman abilities and was sure that in just a few years the need for auditor’s would decrease even further. Sue asked Travis the following questions as she wanted to sit down with the engagement partner and discuss the responses with him.
1. What is the difference between Data Analytics and Artificial Intelligence-based Auditing?
2. Can AI systems replace the need for auditors? Why or why not?
3. How can AI audit platforms improve overall audit quality?
4. What risks associated with the using AI should we be aware of?
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