Meanwhile, another report from Protiviti looked at how companies' internal audit functions are investigating the future use of AI. A majority of organizations (59%) think that advanced AI systems will pose significant risks not in the near term but in two to three years. 

BDO’s survey results—based on responses from 200 finance leaders at middle-market companies—revealed that when properly utilized, advanced technology is expected to improve the audit experience for finance units and their external auditors. However, despite the perceived advantages, utilizing advanced technology in auditing does not overcome all challenges. 

For instance, audit firms want to adopt new technologies to ensure a smooth audit experience. However, their clients run into problems when working with the external auditors’ technology. Finance leaders ranked various areas they find challenging in their audit firms’ technologies, such as compatibility issues (80%) and extracting and merging data from various systems (77%).

Using advanced technology is imperative, but it still has to be combined with the human touch. According to the survey, although many companies state that technology will be key to a more efficient and transparent audit, 56% of respondents said that effectiveness and a proven track record are top factors when selecting their external auditor. 

As the survey report said, “Though survey data underscores the importance of auditors leveraging technology to meet client demand, it is critical to understand that technology cannot replace professional skepticism—a hallmark of an auditor’s role that remains essential to preserving trust in capital markets. The intentional inquisitiveness and judgment that experienced auditors bring to the engagement allows them to adequately assess evidence, detect errors, and identify potential frauds.”

There is no doubt that companies feel that AI is an essential component of the future in audit, but many still see it as a risky proposition, maybe not for now but definitely going forward. 

Protiviti’s survey showed that while IT audit leaders and professionals do not think AI presents a high level of risk in the next 12 months, what comes further ahead is a different story. A majority of respondents view advanced AI systems as posing considerable risks to the business in two to three years, far exceeding other emerging technologies such as advanced IoT systems.

The global consulting firm surveyed more than 1,200 executives and professionals including chief audit executives and information technology audit leaders.

Organizations are taking AI seriously by involving internal audit in examining AI opportunities. The survey showed that in most organizations, the internal audit function is involved in researching the future utilization of AI, with 52% researching the future use of AI, 39% auditing the use of AI in the organization and 39% using AI for internal audit activities.

Engaging audit “is a positive development, considering the integral role that IT and internal audit functions play in assessing that AI is implemented effectively, efficiently and in a controlled manner throughout the enterprise,” the report said.