Is AI A Threat or Opportunity?



Nowadays, the debate whether high risk of computerisation is still going on. The potential of job losses has been an argument since it was coming up strong with the existence of smart automation which is AI, robotics, and other digital technologies. The prediction of artificial intelligence (AI) technologies which can have various impacts on the business is depending on the industry affected. This includes auditors, who will later adopt to this emerging technology. Basically, AI is the human intelligence that is operated with machines, including learning, reasoning and self-correction. Furthermore, there are many AI applications in some areas, such as healthcare, business, education, finance, law and others. From the perspective of audit, AI is better at understanding on how to see the transparency of algorithms using system, and machine learning is the important one for auditors. Software is one of the examples of AI which designed to help auditors manage all aspects of the audit process. The software are made and trained to imitate the human abilities in thinking and decision-making. According to PWC (2018), the impacts of AI in the early 2020s, late 2020s, and mid 2030s are the algorithmic wave, augmentation wave and autonomous wave respectively where it is descripted as:

  • Algorithmic Wave : The automation is a simple computational tasks and analysis of
    structured data (financial services jobs)
  • Augmentation Wave : The function of technology will have a dynamic interaction for
    clerical support and decision making, including robotic tasks
  • Autonomous Wave : The automation includes a real-world situation that needs
    responsive actions, which focuses more on the physical labour
    and manual dexterity.

While according to the data above, the impacts will be higher in female rather than male jobs in the short term. Again, financial services jobs will be more exposed due to the algorithmic wave in the shorter period and later, transport jobs in the longer period. However, the predictions still need to consider specific tasks rather than the job as a whole, where this, in contrary, has a lower estimate that jobs are going to be at high risk.

In this paper, the author analysis will be based on the data-set research to find the higher potential effects of Artificial Intelligence.


The goal of this paper is to examine the direct effects of artificial intelligence in the current situation and more specifically, in the audit firm. Later, it will discuss on the transformation of technology in terms of artificial intelligence and how it could give direct impacts to auditors. Furthermore, several points on the current condition, whether or not auditors can be replaced by AI and how to prevent the risk of job-losses on happening in the future will be discussed below.


In this chapter, the information will be discussed based on the theoretical background that was collected before. The first discussion will focus on the role of auditors in this high-tech era and continued with the second point, which is the combination roles of artificial intelligence and auditors.

The role of auditors in technology

The rapid changes of technology makes both the organization and client expect more contributions from auditors. By hence, organization gives more attention and force the role of auditors to change. In fact, there was more pressure in 1990s in facing the complexity of transactions, thus forced the technology to develop, as a result, the role of auditors also changes since that. New approach was used to gain a deep understanding business activities of the client, so that auditors are able to assess the level of risk in auditing.

Contributions are hard and soft skills, which hard skill is understanding the design of technology and how auditors can implement the system to achieve the objectives. Whereas soft skill is the communication skills, which means the auditors ability to write an understandable financial reports for the users. Moreover, the interpersonal skills also obliges auditors to link and communicate between workers and organizations. Nevertheless, the proper attitude on auditors in decision making and judgement remain important as the technology implemented.

The changing of audit roles includes the use of more software instead of paper-basis. The technology allows auditors to spend more time on the difficult audit tasks because the simple audit tasks will be done by system. However, the auditors need to adapt and understand the usage of technology at first. The responsibilities of IT auditor are more on identifying weaknesses and creating action plan to prevent any risks of security breaches.

Furthermore, in some systems, they are able to solve the assignment without human hands. However before the independent system happened, in reinforced learning, current auditors will teach the system to fix the errors and get those issues as many as possible so that it will get expert over time.

Artificial Intelligence Adds Value to Audit

A technology nowadays, plays a vital role in business including the work of auditors. A lot of people might wonder how AI can help auditors analyse the data and find any fraud or misstatement. So as to answer the question, the opportunity of artificial intelligence to enhance and make the works of audit easier, leading to a solutions in the future is already proven and it came true. As it can be seen, large audit firms tend to use and develop computerized system to help auditors in the firm. The development of technology has the ability for auditors to simplify the audit jobs and most importantly to mitigate the risks. Based on EY (2019), AI offers in-depth analysis of data, data mining, machine learning, sentiment analysis and others. Here, machine learning can notice if there is any frauds by creating practical models in this machine and later it will be used to assign a risk score to each transactions. Contract review, for instance, with larger number of contracts could be analysed more accurately and precise in shorter time using pre-selected criteria compared to the normal capability of human. In this case, auditors can optimize their time in judging a higher volumes of data or documents.

Together with depth-analysis, it can analyse unregulated data such as emails, social media posts and conference call audio files, by that it will add value to the auditors because auditing has complex challenges to be solved. Early warning system is the example to prevent threats that are material. Automated system to look behavioural information in the client such as office building check-in and check-out times, could make the auditor works easier in assessing the control risk. Moreover, artificial intelligence can diagnose the audit works around the world without boundaries that later will connect the resources that are subjected to the activities.



The research methodology of this paper includes the research strategy, method and ethical considerations of the project.

Research Strategy

The research was made on the basis of previous academic research existing on the internet, such as journal article, accounting review and others. Using a quantitative method, it has more generalizable and reliable sources because it is controlled and designed on the other researchers thus, it is used in the paper.

 Data Collection

It is mentioned above using the quantitative method which more specifically through the existing data that was collected. The source of material was came from the journal article from big 4 firm or other accounting research focusing on auditing. One of them came from EY who conducted a survey to the auditors using a test panel. The survey is not only answering the questionnaire, but also allowing the auditors to give their opinion. Survey is well distributed to several locations which through online and offline basis.

The criteria used to select the information was based on the previous research which in the topic with the experts, such as Deloitte, PwC and other studies by specialists in auditing, accounting and finance. This allows the prediction and to give a deeper explanation on how automation or AI might give the impacts on jobs over time, however results should not be considered to be accurately 100% in the future.


Based on the quality of research, the author tried to increase the validity with using different sources of data. To increase the reliability of the data, the journal was reconciled to one another to make sure the data would be the same. The writer analysed the results from this paper whether it came from surveys, interview or else to reduce the likelihood of invalid data. With this intention, the average data was earned by surveys since the reliability will be higher because it is distributed in different areas and completed anonymously. Thus, the reliability of the data can be trusted.


The Future of Audit

McKinsey Global Institute mentioned that the current technology will make 49% of work activities automated. However, from the perspective of Deloitte, projects robotics would automate 40% of basic accounting by 2020. Given that, at least up to 2020, it is not going to be fully automated or even unsupervised by human hands based on their predictions. There are many audit firms these days− who have a collaboration with software company− creating an integrated audit solution to enhance the auditing process with technology. This, in line with the prediction according to The Future of Employment (Frey,C., 2013), that accountants and auditors will be automated probably 94% in the future, taking the second highest position amongst the 6 jobs.

Notwithstanding, further factors should be considered such as communication skill with the client. Clients always look at someone who they can trust and work with, and some auditors sometimes find it difficult to have an in-line conversation as a group (KPMG, 2019). Judgements between client and the firm could be different, therefore human should be able to explain the reason of the decision they made. In term of this, AI is not capable to handle and justify the explanation, thus soft skill that auditors provide is going to be needed.

As the technology changes, the focus on auditor of doing their tasks will be different which previously on mundane sampling and now, the core is in riskier transactions based on the data analysis. With AI, auditors have more access to their client’s data and as a result, it allows them to achieve complex risk assessments and higher quality of audit results. Despite those advantages, the AI is still on progress to upgrade to the next stage. It has been programmed to audit rules up to this stage and again, it still does not have the ability to make its own judgement like auditors do. In the end, auditor is still accountable for interpreting what the machine cannot.

Given these points, what the auditing looks like in 20 years from now will fully be competitive. Reliability and accurate results would be a serious concern for both client and third parties. Whereas in the future, the machine is going to be explainable in its own results, many people are concerned whether or not the system will be biased and from time to time, this issue will be solved with new innovations. The question now is who is going to judge the machine? Yet, another independent firm is needed to justify the reasons why it is reliable to be trust-worthy and to verify that the system is doing as it is told. Based on Gartner, the research firm, artificial intelligence will generate more rather than eliminate jobs, to specify, 2 million net jobs created in 2025.

Is AI an Opportunity or Threat?

AI Technology is already famous in replacing some job positions including accounting and auditing. Nowadays, the technology has upgraded to do the basic accounting and auditing tasks such as audit process. It cannot be denied that AI is really helpful for auditors to reduce their time-consuming, however the biggest concern is that this technology will be independent thus later, replacing human jobs.  According to Gartner (CNBC, 2017), the capabilities of technology always has its own limits that there will be a need on human works. Take an example of the condition nowadays that the technology could complete the tasks more than humans do on average and moreover, it handles with accuracy and lower risks. Even if the AI is categorized as ‘expert’, rather than replacing auditors, the AI provides an efficient task to focus more which is the data analysis of its results and after all, it still needs human hands.

As the technology changes rapidly, it will create potential job functions in the company regardless how expert the machine is. Such as it is, the only thing auditors can do is to learn how to maximize its use because there will be a lot of competitors in the future. How to prepare the future is mentioned as: “The better auditor can integrate and utilize AI technology, the more valuable auditors will be” (Finance Voices, 2018).

Regardless on the advance of the technology is, accountants and auditors should not be worried of job losses because it is created to serve more efficient services to the client. However, the probability of job losses itself depends on the workers right now whether or not they want to upgrade their skills and follow up the advance of new technology. In this case, what needs to be done with existing auditors is to improve the technology skills to balance the current artificial intelligence. The forward technology will eliminate middle or low-level positions however, then creating highly-skilled jobs. In this case also, students need to gain the skills in incorporating IT in their program seriously. The skills of graduating students are what the firm needs in the future because they have learnt the program since beginning. While existing auditors can obtain the skills from joining the workshop, seminars, courses or self-learning program. Thus, the power of artificial intelligence on becoming opportunities or threats jobs cannot be determined or in other words, it depends on the workers.




To conclude, the rapid changes of technology in this world allow auditors to gain more knowledge and skills. Then, it will make the work of auditors easier by focusing more on the detailed tasks in assessing control risks because AI is made to simplify audit jobs. However, the prediction of auditors to be automated would be around 94% in the future. Again, soft skills in human hands are still needed by the system to make sure that everything is under controlled, therefore they are accurate and reliable.

Furthermore, whether AI technology can be threats or opportunities in the future depends on the workers themselves. As it mentioned, the existing auditors need to improve their skills so that they can satisfy the clients through maximizing the use of AI. While for students who are still learning in universities, need to gain their knowledge as high as possible, moreover to make sure they are aware of the future jobs needed by the firm. It is in human hands to transform the future adaptable or intractable with using AI.



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