At the AICPA Conference on Current SEC and PCAOB Developments, PCAOB officials gave a measured view of how artificial intelligence and private equity are changing the audit landscape, noting both its potential for stronger audits and the risks to core professional values, said Accounting Today.

In his prepared remarks, Acting Chair George Botic acknowledged that AI is already improving parts of the audit process. “AI has the potential to erode qualities that go to the core of what it means to be an effective auditor,” he said,

He pointed to enhanced risk assessment, more efficient population testing, and the automation of manual procedures. At the same time, he cautioned against over reliance.

Research Botic cited, including a recent MIT study, suggests AI tools can erode critical thinking, professional judgement, and skepticism. These shifts may require firms and educators to rethink how junior auditors build foundational skills. 

Private Equity a Double-Edged Sword

Botic also told the forum that private equity is a double-edged development. New capital can support technology investments, recruitment, and succession planning, yet it also “may, over time, begin to shift firm incentives so that profitability outweighs audit quality.”

He also cited concerns from Accountancy Europe that private equity-backed expansion could stress staffing levels and controls. 

PCAOB’s Division of Registration and Inspection Director Christine Gunia reiterated both warnings. She pointed out that over 90 firm transactions related to private equity have taken place since 202, adding that inspectors would be paying close attention to impacts on independence, culture, and resource allocation. 

Across both issues, PCAOB leadership emphasized that AI and private equity may modernize the profession, but skepticism, judgement, and human oversight remain indispensable.