The AI audit has arrived, according to new KPMG report

We’ve all known the AI audit is coming—but a new report from KPMG proves just how popular AI has already become in the audit process.

The report polled more than 200 financial reporting leaders in the US between July and August. The headline takeaway? The AI audit is already close to ubiquitous.

Sixty-five percent of respondents said they’re already using AI in their job functions, while 49% said they’ve “piloted or deployed generative AI solutions.” Meanwhile, 71% said they expect to use AI “extensively in the next three years.”

But there are a few key roadblocks. Thirty-two percent of respondents said they’re worried about data privacy, and 33% said the transparency of AI models concerns them.

In light of potential risks, 29% of the financial reporting leaders surveyed want auditors to complete third-party attestation to analyze how AI is being used, while 36% want “detailed reviews of control environments.”

Yet for any potential risks, financial reporting leaders remain firmly optimistic about the upsides of AI implementation in the audit process, according to the survey. Notably, 52% of respondents said they expect AI to “attract new talent to financial reporting roles.”

That’s partly out of a good kind of necessity, Tim Walsh, national managing partner for audit operations at KPMG, told CFO Brew.

“The vast majority of [survey] participants certainly believe that AI and gen AI [has an] extensive use but also expansive use as it relates to efficiencies, accuracy, [and] reliability of the work that they’re doing in the financial reporting function, but they didn’t believe that it would reduce the number of professionals they would need in the process,” he said.

Walsh continued: “Although we can deploy these [new technologies], we still need professionals to review the output, to make sure the routines that are being run are the right routines.”

This particular survey finding—that more people might be drawn to financial reporting as a result of the changing nature of the field—didn’t come as a surprise to Walsh, and he noted that CFOs need to pay attention to the “next gen auditor” as much as those directly involved do.

“In a lot of the work we’re doing, we really refer to [changes in the field] as our ‘next gen auditor,’” Walsh explained. “The auditor of the future” will do much more data analysis, and start analytical procedures “much earlier in their careers than they have historically done,” he noted. “We certainly are finding students being very attracted to that type of field.”