Exploring the Role of Artificial Intelligence in Enhancing Risk Assessment During the Audit Process

Posted: Jul 22, 2021

• Gemma Cox
• Kai Mitchell
• Serena Greene

Abstract

The audit profession stands at a critical juncture, facing increasing complexity in business environments, regulatory requirements, and stakeholder expectations. Traditional risk assessment methodologies, while proven over decades, increasingly show limitations in addressing the velocity, variety, and volume of contemporary business data. This research addresses the fundamental challenge of how artificial intelligence can transform risk assessment from a primarily retrospective activity to a predictive, dynamic process that enhances audit quality and effectiveness. Risk assessment constitutes the cornerstone of the audit process, determining the nature, timing, and extent of audit procedures. Conventional approaches rely heavily on auditor experience, analytical procedures, and understanding of the entity and its environment. However, these methods often struggle with cognitive biases, resource constraints, and the inability to process complex, non-linear relationships within large datasets. The integration of artificial intelligence presents an unprecedented opportunity to overcome these limitations while preserving the essential role of professional judgment.