Aye, AI, Sir!
As a movie buff growing up in the 1990s, I remember being fascinated by many sci-fi films. My favorite movie was Robocop - a film that dazzles the senses and tickles the mind by the sheer awe of a machine cop single-handedly taking down all the bad guys. With the slew of futuristic sci-fi movies (think: Terminator, Judge Dredd, Fifth Element and The Matrix), I was convinced that flying space cars and thinking robots would be part of our lives someday. Alas, as I grew older I realised that these were nothing more than just wild Hollywood plots.
However, things changed in November 2022. ChatGPT, an AI chatbot, gained prominence and became a trending topic online. Being a skeptic (not an uncommon occupational hazard among auditors), I thought it was just another Siri or Alexa. But to my surprise, the chatbot was actually able to provide intelligent responses.
Still unconvinced, I asked the chatbot to compose a rap for internal auditors. To my amusement, it did its job -
“I’m an internal auditor,
I’m here to scrutinise,
I make sure everything is proper,
And nothing is left to surmise.
I’m the eyes and ears of the business,
I’m trusted with great responsibility,
I’m an internal auditor,
Ensuring integrity and accountability.”
I tested the chatbot further by asking it to write a hypothetical finding on ‘the lack of segregation of duties in an account reconciliation process’. The tool did not disappoint and wrote its findings complete with risks and recommendations, in under 10 seconds.
With the chatbot having proven its worth, it got me thinking on how internal auditors can use AI to become even more efficient and effective.
In the past, internal auditors have relied heavily on manual processes and subjective judgment to identify risks and assess controls. While these traditional methods have their place, they can be time-consuming and may not always provide the most accurate or comprehensive insights.
AI’s machine learning algorithms and natural language processing can help internal auditors analyse vast amounts of data and identify patterns and trends that might otherwise go undetected. This not only helps to uncover potential risks and internal control weaknesses more quickly, but it also allows auditors to focus on more high-impact areas of the business.
One of the biggest benefits of using AI in internal audit is its ability to automate routine tasks and provide real-time insights. For example, AI can be used to continuously monitor transactions and identify unusual patterns that may indicate fraudulent activity. It can also help to prioritise audit procedures based on the likelihood of finding material misstatements.
Another advantage of AI is its ability to analyse unstructured data, such as emails and documents. This can be particularly useful in the audit of contracts and agreements, where manually reviewing large volumes of documents can be time-consuming and error-prone. By using natural language processing, AI can extract relevant information and identify key terms and conditions, helping auditors to assess the risks associated with a given contract faster and more accurately.
Despite the many potential benefits, there are some challenges to consider. One concern is the potential for AI to replace human judgment and expertise. While AI can certainly automate many routine tasks, it is important to remember that it is still merely a tool and should be used together with human intelligence to produce augmented intelligence.
AI is certainly a powerful tool - about half of what you have read so far, was written by the chatbot. So, here’s a challenge – can you spot what the chatbot wrote?
PS: Asking the chatbot is not an option!
Koh Yong Chuan is a Corporate Auditor at Chevron Singapore who is curious about learning and applying productivity hacks. He believes that AI is a gamechanger that could help enable better and faster audits.
The Institute of Internal Auditors Singapore blogs reflect the personal views and opinions of the authors. These views may differ from policies and official statements of The Institute of Internal Auditors Singapore and its committees and from opinions endorsed by the bloggers’ employers.