An AI to audit companies? The Ibex could save 285 million a year

Update Post: December 4, 2023 10:46 pm

There are those who already use artificial intelligence (AI) as another resource, replacing or complementing the work of their employees. In fact, algorithms are already actively participating in the collective negotiation of agreements and have even fully entered the Stock Market, in such fundamental issues as cybersecurity, predictions, management or administration. Now, artificial intelligence is beginning to be considered to audit companies themselves. A qualitative and quantitative leap that, for example, could save the Ibex up to 285 million euros.

Roberto Rovere, chief auditor of BPER Banca, explains in an interview published by McKinsey that AI has already become an indispensable tool to be able to “provide transparency to the board of directors, information to the business and the company, and an attractive proposal for our “talent in auditoriums.” Ideally, AI should be able to offer an “independent, timely and complete view of the controlled environment” in the future. That is, be as reliable or more reliable than a human auditor. “This is what stakeholders expect “, he concludes.

To measure the impact that an AI capable of auditing companies would have, we can take the Ibex 35 as a reference. The companies present in the Spanish stock index spent a total of 284.53 million euros in 2021 on the audit of their accounts, as and as extracted from their consolidated annual reports. An amount that, if artificial intelligence comes into play, could plummet. But completely? Could AI autonomously audit any company?

The transformation of audits thanks to AI

For Rovere, companies face emerging risks that are becoming increasingly significant, especially in the post-pandemic era. These aspects, which include digitalization, innovation, market competition and factors such as environmental, social and corporate governance (ESG), “require a completely new approach and therefore a change of mentality in our way of approaching them.” For this reason, he recognizes that BPER Banca is in the middle of a transformation of the audit function, focused on four pillars:

Promote dynamic risk assessment using predictive analytics. Build a strong dialogue with the business through risk- and data-driven audit execution. Improve the monitoring and reporting process. Adopt a dynamic and continuous audit approach.

In this sense, Rovere believes that AI and data analytics are the most powerful enablers to drive his vision, because they have greatly benefited the audit function in four key areas: risk assessment, dynamic audit planning, execution of Risk-driven auditing and reporting. One vision he presents to us is that of a more predictive audit, supported by artificial intelligence.

“The results are talented and are driving us to challenge ourselves even more to continue on the path of obtaining positive results,” he concluded.

In short, artificial intelligence appears poised to play an increasingly influential role in the world of corporate auditing. As companies and their internal auditors look to adapt to an ever-changing risk environment, AI and data analytics are proving to be critical tools to ensure not only efficiency but also effectiveness in an increasingly complex and in constant evolution.

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September 24, 2023 1:01 pm