Clients expect auditors to use AI
October 7, 2024
Companies increasingly expect their audit firms to leverage artificial intelligence to aid the audit process, according to a new survey from BDO USA.
The firm's inaugural Audit Innovation Survey polled 200 finance leaders at middle-market companies about their feelings on the use of advanced tech in the audit, challenges within the audit process, and how teams are using AI to supplement ongoing talent shortages in accounting.
Before even engaging with an auditor, 64% of respondents say they confirm the firm uses AI. However, 87% of the respondents said technology, financial systems and processes create audit challenges.
Just over half of the respondents anticipate technology will enhance audit quality (54%), but finance leaders continue to put a high importance on auditor industry knowledge and professional skepticism as contributors to a high-quality audit.
Some 63% of the senior finance leaders polled say trust is somewhat or significantly enhanced for them and their key stakeholders when auditors use advanced technology, and 64% say they look for a firm to use AI before even engaging with an auditor.
Finance leaders plan to leverage AI to supplement the talent shortage. While recruiting experienced accountants is the top strategy for companies grappling with the labor shortage, 61% of the survey respondents plan to improve workforce inefficiencies with AI.
Poor data hygiene is holding back companies from a smooth audit experience, with 46% of the respondents saying their data governance is not or is only somewhat mature.
In terms of which strategies finance teams are turning to amid a shortage of accountants, adopting advanced technology like AI is one of the top choices (61%).
"We know that innovations like AI are reshaping the audit landscape, but it's essential that we understand finance leaders' top priorities and challenges in this shift," said Demetrios Frangiskatos, national managing principal of assurance operations at BDO, in a statement. "What we learned validated the critical importance of aligning audit technology with client needs and underscored the demand for auditors who can skillfully leverage these tools to maintain and enhance audit quality. By understanding these needs and expectations, we can help ensure that audit quality and trust remain at the forefront as the profession evolves."
[Accounting Today]
