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Perspectives

Cognitive technologies

Bringing value to the audit process

​While it's unlikely that auditors will be automated out of existence, cognitive technologies can bring value to the audit.​

Moving forward with cognitive technologies

It's likely that over the next several years, substantial portions of public and private company audits will be augmented by cognitive technologies. In fact, much of the audit profession is exploring, experimenting, and moving forward with efforts to use various cognitive technologies in the audit.

To be clear, it's unlikely that the profession will arrive at a fully automated audit with no human intervention on the horizon, and it continues to hire more auditors each year. But there is a consensus within our organization, at least, that cognitive technologies can bring substantial value to the audit process for auditors, clients, and the investing public.​

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Three key factors characterize a sound approach to a cognitive-enabled audit

A global approach
This approach involves the formation of a global audit innovation team with members across the global organization. One of the team’s tasks is to constantly sense and evaluate new technologies to pursue a variety of coordinated projects that are expected to ultimately facilitate agile, cognitive-enabled audits anywhere in the world.

Best of breed components
While there is already much investment within the audit profession to build and leverage proprietary automation, and cognitive and analytics capabilities internally, there are two basic approaches to implementing external advanced technologies. One is to embrace a single developer’s approach, employing multiple capabilities from that one provider. The other is a “best-of-breed” approach employing components from multiple developers. Advancements in cognitive technologies increasingly favor the latter approach, given that even the largest developers typically offer a component-based architecture using a set of application program interfaces (APIs).

A process for cognitive audit development
One key lesson that can be derived from working with cognitive technologies across the audit is that a task or activity often isn’t ready for cognitive transformation. An audit task might, for example, currently be executed in different ways throughout the world to accomplish the same objective. Or it might be performed without benefit of any technology, suggesting that there may not be enough digital data for a cognitive approach.

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A process for cognitive audit development

The future role of auditors

One might think that cognitive technologies would reduce the need for, or possibly even eliminate, auditors. It is true that cognitive technologies enable the automation of tasks that have been conducted manually for decades, such as counting inventories or drafting communications. However, this can liberate the auditor's time to focus more on risk areas and less on rote tasks. Yet the potential of cognitive technologies doesn't just automate routine tasks—it can also enhance an auditor's professional judgment by modeling thought processes that can be contrasted with initial conclusions.

The end result is an enhanced role for auditors. Freed of performing repetitive manual tasks, they can enhance audit quality by monitoring the outcomes of automated tasks, reviewing advanced analytics, and assessing the implications of findings. By allowing auditors to spend more time exercising their professional judgment, and enabling them to better understand their client's business, we are confident that future-state cognitively-transformed audit processes will also enhance the skills and satisfaction of the auditor. Although new skills will be required, we see plenty of demand for well-trained auditors for decades to come.

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Download the full PDF, Creating a cognitive audit, co-authored by Jon Raphael and Tom Davenport
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