How AI is Revolutionising Auditing and Taxation
The traditionally lengthy and arduous tasks of auditing and taxation are undergoing a significant transformation, thanks to AI.
A recent survey of over 750 finance executives revealed that 73% of tax professionals believe AI can help accounting firms modernise processes, improve accuracy, and deliver more value.
"In the 80-plus years since the Great Depression, we are experiencing the first significant transformation in how financial audits are conducted," Drew Lahav, Senior Director at GEP told AI Magazine.
GEP is a global consulting company that provides its clients AI-powered software, giving them first-hand experience across a range of businesses on how AI can optimise their internal financial processes.
“AI and robotic process automation (RPA) are streamlining tasks that previously took hundreds of human hours to complete down to minutes, while reducing errors and risks.”
Despite extensive preparation and countless hours spent verifying records, errors in taxation and audits are not uncommon. This is where AI offers unprecedented efficiencies and accuracies that were previously unattainable.
AI in taxation and auditing
The implementation of general AI and RPA is streamlining tasks that once required substantial human effort. These technologies enable professionals to handle large volumes of data efficiently and automate routine tasks.
"We have reached an inflection point with a rush to adopt AI solutions to streamline tax and auditing, with the 'Big 4' announcing billions of dollars investing on AI and cloud services over the next few years," Drew explains.
Indeed, GEP state enterprises seeking tax and audit services are now looking for providers with AI-powered technological expertise.
This is because RPA bots can extract data from various financial documents, perform validation checks, and ensure consistency across multiple sources.
Equally, the automation reduces manual data entry time and minimises the risk of human error, and AI's ability to process large datasets also allows for more comprehensive risk assessments and anomaly detection, enhancing overall audit quality.
AI plays a crucial role in audit documentation and fraud detection by automating report generation and maintaining organised audit trails. It can also flag suspicious transactions in real-time, reducing the risk of financial misconduct and ensuring compliance with regulations.
"RPA and AI have already arrived and are rapidly remaking auditing and tax functions," says Drew. "Any procurement and financial team not using AI will be disadvantaged and eventually superseded."
Auditing no longer taxing with AI
In the realm of taxation, AI simplifies compliance and reporting by automating the checking of tax laws and regulations. This reduces the risk of late or incorrect filings and ensures accurate and timely tax calculations.
"Today, RPA's are effectively doing the company's financial reconciliations, compliance, reporting, fraud detection, and performing complex tax calculations," Drew explains.
AI's ability to perform complex tax calculations quickly and accurately is invaluable for businesses seeking to optimise their tax strategies.
However, despite these advancements, human expertise remains essential. While AI enhances efficiency and accuracy, human auditors and tax advisors are needed to interpret results, apply professional judgement, and make critical decisions.
Although the value of this technology in taxation and accounting lies in accuracy and speed, what this translates to in real-terms is freeing up skilled professionals to now focus on strategic decision-making and value-added activities.
As the technology continues to evolve, it promises to significantly enhance these fields while working in tandem with human expertise.
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