Article Search: En. Mohd Nasarudin

Source: https://www.nature.com/articles/s41599-024-02905-w#Sec14

Artificial intelligence (AI) can support the company’s internal audit function (IAF) by delivering substantial strategic oversight, minimizing manual procedures, and making possible additional value-added auditing service. Currently, there are research gaps in the literature, such as limited studies on the topic, low AI adoption rates in the IAF across different countries and regions, and a shortage of comprehensive frameworks for effectively using AI in the IAF. Hence, this review work aims to fill the research gap by offering an outline of research avenues on the topic in the literature and suggesting a new compressive framework for the effective use of AI in the IAF. This paper undertakes a systematic literature review (SLR) approach and aspires to highlight the state of research on the use of AI in the IAF, to deliver insight for scholars and industry experts on the issue, and to reveal the implications for IAF of the new AI technology. Moreover, to quickly make artificial intelligence work in internal audit functions, the CACS framework was recommended with attributes such as commitment, access, capability, and skills development (CACS). This work provides significant contributions for guiding future research directions and the development of theoretical foundations for the IAF field. On a practical level, the work will help internal auditors to assess and understand the potential advantages and risks of implementing AI in their organization’s IAF. For regulators, this review should prove useful for updating regulations on internal auditing in the context of using advanced technology such as AI and for ensuring the compliance of internal auditing practices to the evolving technology. Organizations can also benefit from this review to decide whether AI investments in their IAF are justified. This review made an initial extensive SLR on AI use in the IAF as a basis for developing new research avenues in auditing and accounting.

Does artificial intelligence replace internal auditors’ jobs?

Many scholars have argued that AI would reduce job opportunities for internal auditors, while others have argued that it is an opportunity for them. According to Mach (2022), several companies and institutions do not utilize AI in their IAF due to the perception that AI will substitute actual employees. However, the evidence to date is that AI does not replace actual employees. It appears that internal auditors and AI can perform together to improve processes and effectiveness. AI will not replace the auditor’s assessment of interviews, decisions, and judgment. Instead, it improves their performance by providing them with advanced tools and prospective outcomes.

Moreover, according to Muspratt (2018), although many have thought that AI would terminate internal auditors’ jobs, however the truth is more complex than originally perceived. It turns out that AI helps to develop the market for the work of the internal auditors’ by creating further advantages for workers to emphasize their work’s complex matters that need human involvement. Moreover, AI has proven useful for managing the tedious and routine procedures that frequently take the most working days. Additionally, the paper demonstrates that the AI technology is intended to support creativity and provide assistance, thus allowing internal auditors to be more effective in the tasks that they have been given to perform. Generally, the view is optimistic for AI to become a useful tool for the internal audit profession in the long run. But the development path will not be smooth and occasional troubles can be expected along the way (Q.ai-Contributor-Group, 2022).

Conversely, according to Parker (2022), people-oriented work has diminished in some industries because of capital-oriented advanced technologies. If internal auditors in the IAF in the future do not advance their skills, there is a risk that AI-powered machines could replace their positions. In addition, as one scholar has demonstrated, many people have lost their jobs because AI has replaced almost all routine activities and further tasks with computers and robots. Since it has a high degree of accuracy, almost all companies desire to utilize AI-oriented robots in their IAF. Soon, this challenge will extended to other industries, and the job loss caused by AI will become an existential matter for large classes of workers (Adhikari, 2021). Likewise, the health research funding (HRF, 2022) has argued that as AI-oriented machines are introduced to accomplish people’s work faster and at lower costs, the level of jobs lost is rise with even the internal audit profession being at risk. Similarly, other scholars have contended that when AI becomes more common in organizations, it could reduce job openings because AI will be able to manage routine activities that previously were performed by employed staff (Tableau, 2021; Yakimova, 2020).

Generally, the message from the above arguments, is clear: - it is time for internal auditors to use their skills and talents in their jobs. In order to be prepared, it is essential that internal audit professionals remain up-to-date with the AI technology. By familiarizing themselves with this technology, the necessary skills and understanding will be developed. Otherwise, it will be a challenge rather than a prospect for them. In the era of AI, to qualify for work in the internal audit function, a prospective employee will need to understand the technology better, to get proper training, and to acquire the necessary mindset that the use of AI is a competitive advantage.

Date of Input: 30/05/2024 | Updated: 30/05/2024 | muhammad.isam