Unleashing the Potential of Artificial Intelligence in Auditing: A Comprehensive Exploration of its Multifaceted Impact

Rajesh Patel, Fatima Khan, Buddhika Silva and Jakhongir Shaturaev

MPRA Paper from University Library of Munich, Germany

Abstract: This research paper examines the impact of Artificial Intelligence (AI) on the financial audit process and explores how it enhances auditing practices. The integration of AI technology in financial audits has the potential to revolutionize the profession by automating tasks, providing real-time analysis, enhancing risk assessment capabilities, and offering valuable insights. This research investigates the implications, benefits, challenges, and ethical considerations associated with AI integration in the audit process. The literature review reveals that AI improves audit efficiency by automating manual processes and reducing the time required for data analysis. AI-powered tools enable real-time analysis, enhancing risk assessment by detecting anomalies and potential fraud indicators promptly. AI algorithms also contribute to more accurate and informed decision-making by analyzing complex datasets and identifying patterns. Ethical considerations, such as fairness, transparency, and unbiased decision-making, must be addressed when integrating AI technology into audits. Based on the literature review, hypotheses are developed to test the relationships between AI and audit efficiency, risk assessment, audit quality, and decision-making. These hypotheses propose that AI integration improves audit efficiency, enhances risk assessment capabilities, facilitates more informed decision-making, and requires ethical considerations and collaboration with IT professionals for successful implementation. The findings and discussion emphasize that AI technology has significant potential implications for audit quality, efficiency, risk assessment, and decision-making. By leveraging AI's analytical capabilities, auditors can improve audit quality, proactively address risks, and make more accurate decisions. However, further empirical research is needed to validate these findings and address ethical considerations. Future research should focus on the long-term effects of AI on audit quality, explore ethical frameworks for AI integration, and examine auditors' technological skills and collaboration with IT professionals.

Keywords: Artificial Intelligence; Audit; Transparency; Fraud; Financial Accounting (search for similar items in EconPapers)
JEL-codes: M4 M42 M48 O3 O33 (search for similar items in EconPapers)
Date: 2023-08-08, Revised 2023-12-05
New Economics Papers: this item is included in nep-acc, nep-ain and nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations:

Forthcoming in Journal of Artificial Research 35.4(2023): pp. 41-57

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