Over 21% of companies in the UAE have adopted AI in the last few years. While AI is mainly being integrated into sectors like cybersecurity, logistics, and healthcare, the potential of AI in auditing is gaining traction, especially in Big 4 companies like Deloitte.
With this shift, it’s fair to ask the question: are we finally moving past the spreadsheet era?
Is AI the Future of Auditing?
- Planning: AI can be used to find discrepancies in large datasets, making risk assessment much quicker.
- Journal Entry Testing: While the general audit process involves sampling a few journal entries, AI in auditing can easily test all the entries and identify irregularities.
- Reconciliation: Tools like DataSnipper can match records and check files automatically in Excel. This saves auditors massive amounts of time and minimizes human error.
- Real-time alerts: AI tools can send alerts when patterns shift or when something seems off, giving auditors a chance to act quickly.
Benefits of Artificial Intelligence in Auditing
- Detecting fraud early: AI systems can quickly identify unusual or suspicious behavior across massive data sets. This means auditors can catch issues sooner.
- Reduction in manual errors: AI can reduce the risk of human mistakes by automating repetitive and detailed tasks.
- Review full datasets: AI enables the review of all transactions, not just a selected sample. This reduces the chance of missing errors or fraud.
- More focus on analysis & interpretation: Auditors can spend less time on routine work and more time analyzing results and providing insights.
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Challenges in Implementing AI in Auditing
- Lack of regulations: The rules around AI are still developing. While laws like the UAE’s PDPL provide some structure, specific rules around the use of AI in auditing are still being introduced.
- Algorithm bias: AI tools can sometimes produce biased outcomes or results that are difficult to explain. Auditors need to regularly review these outputs to make sure they are free from bias.
- High training investment: If audit firms in Dubai intend to implement AI into their process, they need to invest in proper training for their auditors. This may not be possible for smaller firms.
- Risk to data privacy: When working with personal or sensitive data, auditors have to follow strict privacy laws and make sure data is stored, used, and protected properly.
- Skill gap for auditors: If AI is part of the future of auditing, companies must upskill their auditors to make sure they have the necessary skills to tackle the integration.
How Can Auditors Upskill for the AI Era?
With artificial intelligence in auditing becoming more common, auditors need to learn how to work with it. These are a few ways auditors can upskill themselves:
- Awareness of AI trends: Stay updated on developments in local AI regulations and auditing standards.
- Basic data analytics knowledge: Understand how AI processes large datasets and identifies risks.
- Familiarity with AI audit tools: Learn to use platforms like DataSnipper which are being used by large auditing firms.
- Soft skills for insight reporting: As artificial intelligence in audit handles repetitive tasks, auditors will need to focus more on analysis, interpretation, and reporting.
UAE’s Data Privacy Laws & AI in Auditing
As more businesses in the UAE start using technology like artificial intelligence in auditing, data privacy has become very important. To protect people’s personal information, the UAE introduced a law called the Personal Data Protection Law (PDPL) in 2021.
This law explains how companies should handle personal data. For auditors, this means they must be extra careful when handling client information, especially when using AI tools during audits.
Here are a few main takeaways from the PDPL:
- Companies must get permission before using someone’s personal data
- People have the right to see and update their own data
- There are rules for sharing data outside the UAE
If auditors are using AI, those tools also need to follow the same privacy rules. Since the law is still being updated and the governance of artificial intelligence is still developing in the country, firms providing audit services in Dubai must keep themselves up to date.
