The Strategist

Artificial intelligence penetrates into the audit industry


09/25/2017 - 15:12



The world's largest audit companies are gradually beginning to introduce artificial intelligence technologies into their activities. Auditors hope that AI will help them to free employees from technical and routine tasks in order to optimize their work.



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Recently, FT reported that audit companies EY and PwC are implementing a pilot project on the use of artificial intelligence (AI) to recognize images, perform part of accounting tasks and other types of routine technical activities that are currently performed by employees. The British edition notes that all the companies of the big four - PwC, EY, KPMG and Deloitte - are actively increasing investments in new technologies, including artificial intelligence, to optimize their operations and to avoid mistakes of the human factor. One of the most promising areas to apply AI is acceleration of filling of applications from and for customers, recognition of abnormalities in financial transactions and analysis of data for possible interference from outside and fraud.

"It's becoming increasingly clear to us that AI will have a tremendous impact on our business, so we are already trying to make the most of this area," said Jon Andrews, PwC UK's technology and investment manager. "Investments in these areas are likely to grow exponentially."

In turn, KPMG plans to implement a system that will evaluate credit information based on analysis of portfolios of loans in commercial banks. In addition, artificial intelligence can be used for predicative analysis and construction of probabilistic models. To implement these technologies KPMG has been cooperating with IBM's Watson project and several start-ups working in the field of AI for more than a year.


The FT notes that the big four auditors are actively introducing AI also because they are trying to defend their positions in the EU market, where competition has recently increased markedly. The new EU rules, oblige companies to announce a tender once every ten years for audit and to change its auditor at least once in 20 years. This new regulation markedly increased number of tenders for conducting an external audit. Thus, the number of such tenders among companies included in the FTSE 250 index increased from five in 2012 to fifty in 2016.

"Expectations in the audit industry are growing noticeably as regulators are becoming more demanding," a representative of Deloitte noted. "Audit firms are trying to stand out from the crowd with their approach to innovation and their own experience, which should provide them with a competitive advantage."

source: ft.com




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