The Audit Committee Institute has advised auditors and accountants to use caution when implementing or relying on artificial intelligence as a business and audit tool.
According to The Punch, in a press release titled “Audit Perspective on Artificial Intelligence – form trust but verify to verify and verify,” the institute’s chairman, Chris Ekeigwe, issued this caution.
Ekeigwe predicted that the complete reliance on artificial intelligence by auditors and accountants in the auditing process, as well as their confidence in AI’s capacity to produce flawless financial reports, could prove fatal for the corporate world.
He recounted how many professionals were encouraged to believe that computers did not make mistakes in the early days of personal computers.
He pointed out that the false assumption caused auditors to overestimate their abilities and rely too heavily on computer reports without conducting thorough checks, which prevented them from promptly identifying fraud and errors. As a result, some businesses in the 1980s and 2000s failed.
He said that false belief had affected companies like Barings Bank, Bank of Credit and Commerce International, Wells Fargo, Enron, WorldCom, etc.
Given the enormous potential of AI today, he said that a “throwback to that era will be even more disastrous.”
Therefore, he encouraged accountants and auditors to be aware of the constant “persuading” attempts made by the tech industry to convince us that AI is trustworthy and infallible.
“It is notable that our generation fetishizes technology to the detriment of control thinking, conceding or attributing unwarranted power to it,” Ekeigwe remarked.
“I see that happening again today with the cognitive impact of the exuberant messaging from the tech industry that we should trust AI, even though we see increasing signs that AI is not sufficiently trustworthy to warrant our implicit trust,” the author said.
He claims that the idea of “verify and verify” in light of the possible risks posed by AI is more than just an emphasis; it is an assertion of significance.
In the context of artificial intelligence, he asserted, “Truly, verify and verify influences the future performance of controls and audit results, and, consequently, the future going-concern posture of an entity.”
According to him, the auditing process should switch from “trust but verify” to “verify and verify.”
