The landscape of auditing is experiencing a profound transformation through artificial intelligence, yet the promised cost reductions remain elusive. Major accounting firms, including Deloitte, EY, KPMG and PwC, have poured hundreds of millions of pounds into AI development, marking a significant shift from traditional auditing methods.
The evolution from manual sampling to AI-driven analysis represents a quantum leap in capability. Modern AI systems can scrutinise millions of transactions within seconds, identifying anomalies that might signal potential issues. This technological advancement enables comprehensive data analysis rather than the limited sample-based approach of the past.
KPMG’s UK head of audit, Cath Burnet, emphasises that AI implementation extends beyond basic numerical verification. The technology can now process extensive meeting minutes, evaluate annual report tonality, and cross-reference thousands of documents for consistency. These capabilities are reshaping the fundamental nature of audit work.
Despite substantial technological investments, audit fees are unlikely to decrease. The considerable costs associated with AI development, cloud computing infrastructure, and cybersecurity measures offset potential savings. Instead, the primary benefit appears to be increased efficiency and speed in completing audits.
The regulatory environment remains cautious about AI adoption. The Financial Reporting Council maintains strict oversight, particularly regarding data reliability and source verification. This cautious approach reflects the industry’s response to previous corporate failures like Carillion and Patisserie Valerie.
The role of human auditors is evolving rather than diminishing. While AI handles routine tasks, professional judgment and complex decision-making remain firmly in human hands. However, industry experts suggest that future audit firms might transform into technology companies, potentially leading to consolidation among the Big Four as the sector continues its digital evolution.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.