Auditors’ perspectives on generative AI
The 2024 Generative AI in Professional Services research conducted by the Thomson Reuters Institute provides a comprehensive overview of the burgeoning role of GenAI across various professional sectors, including legal, tax, accounting, risk, and government.
This study captures the complex spectrum of emotions surrounding GenAI, from hope and excitement to hesitancy and concern. Despite these varied sentiments, a significant majority of professionals acknowledge the applicability of GenAI to their work, though fewer are convinced of its immediate necessity in daily operations.
The audit industry stands out with its recognition of GenAI’s potential to revolutionize tasks such as predictive analytics, flagging potential areas of concern, data collection, and more. However, it also faces challenges related to accuracy, data security, and an over-reliance on technology.
The research emphasizes the critical balance needed between leveraging GenAI to augment human work and ensuring it does not replace the essential elements of professional judgment and decision-making. Let’s take a closer look at the results from the report.
Jump to:
Adaptation to technology
The audit industry is at a crossroads with GenAI. The audit industry is at a crossroads with GenAI. This adaptation isn’t just about keeping up with the technology, but also about leveraging its capabilities to improve efficiency and accuracy. “Many accounting and tax firms are moving away from spreadsheets and towards more connected databases. However, these changes happen slowly and are not always used by all firms.”
— Thomson Reuters Institute 2024 Generative AI in Professional Services report
Perception of applicability
In 2024, a significant 52% of professionals from tax, accounting, and audit firms recognized the necessity of applying GenAI in their operations, a noticeable increase from 49% in 2023. In the corporate sector, this belief increased from 53% to 60 %. This growing consensus highlights the perceived relevance of GenAI in modernizing audit practices.
AI’s impact on audit jobs and billing
Despite the optimism, there are concerns. A small fraction of tax firms anticipate a decrease in billing rates. Conversely, a small fraction anticipates a decrease.
The potential impact on jobs is also under scrutiny, with fears that GenAI might lead to job losses, although it could also lead to the creation of new roles and specializations.
AI policy and regulation for audit firms
One of the challenges facing audit firms is the lack of clear directives from their clients on how to use GenAI in their services. This lack of guidance indicates the need for policies to regulate GenAI usage and ensure its ethical adoption. Just 12% of companies indicated in the survey their organizations had policies that covered GenAI use. Only 3% of firms said they had policies that were specific to GenAI. There’s a pressing need for policies that restrict unauthorized use and provide clear frameworks to ensure that the adoption of GenAI is both ethical and beneficial.
Future of work
The integration of GenAI is expected to bring substantial operational changes. Around 3% of respondents consider AI or GenAI as a necessary skill for job candidates, while 21% view it as a desirable one. This shift indicates that job functions and titles are likely to evolve as the technology becomes more entrenched in daily operations.
Proactive steps for auditors
Auditors are not just passive observers; they are actively exploring and integrating GenAI technologies. This proactive approach is essential for harnessing technological advancements and remaining competitive in a rapidly changing industry. The benefits of GenAI are well-known, but there is also an awareness that robust policies and structured guidance will be needed to effectively navigate this new terrain. As we move forward, it will be essential for audit firms at all levels to engage with AI-powered technologies thoughtfully and strategically.
For more information on this topic, download our white paper, What can AI do for auditing?
