An AI-Based Automated Continuous Compliance Awareness Framework (CoCAF) for Procurement Auditing

Abstract

Compliance management for procurement internal auditing has been a major challenge for public sectors due to its tedious period of manual audit history and large-scale paper-based repositories. Many practical issues and potential risks arise during the manual audit process, including a low level of efficiency, accuracy, accountability, high expense and its laborious and time consuming nature. To alleviate these problems, this paper proposes a continuous compliance awareness framework (CoCAF). It is defined as an AI-based automated approach to conduct procurement compliance auditing. CoCAF is used to automatically and timely audit an organisation’s purchases by intelligently understanding compliance policies and extracting the required information from purchasing evidence using text extraction technologies, automatic processing methods and a report rating system. Based on the auditing results, the CoCAF can provide a continuously updated report demonstrating the compliance level of the procurement with statistics and diagrams. The CoCAF is evaluated on a real-life procurement data set, and results show that it can process 500 purchasing pieces of evidence within five minutes and provide 95.6% auditing accuracy, demonstrating its high efficiency, quality and assurance level in procurement internal audit.

Quality of internal auditing in federal educational institutions: an analysis of the perception of internal audit members and senior management

“…Considering the variables that make up the internal audit functions' construct, this means that an internal audit is viewed as representative of your institution when it produces useful and consistent reports; when it audits areas relevant to your Federal Educational Institution; is committed to continually improving its activities; and directs its efforts toward issues related to risk management, internal controls and governance processes. In other words, by providing useful information that can support the auditees' perceptions and decision-making, internal audit signals that it can contribute to their organization (Van Gansberghe, 2005b), is committed to the quality of its activities, as well as to the impact and reliability of its reports in the decision-making processes of the institution's managers (Wang et al, 2020). Regarding continuous improvement practices, their positive impact on internal audit quality proved to be adherent to the new focus of action pursued by internal audit units, namely, to stimulate improvement and cultivate a mutual and continuous understanding of their auditees (Schillemans et al, 2018).…”

Transformative Procurement Trends: Integrating Industry 4.0 Technologies for Enhanced Procurement Processes

“…The traditional compliance management for procurement's internal auditing has been coupled with many mistakes with a lack of accuracy due to manual audit systems and faults in handling large-scale paper-based repositories. As a solution, Wang et al [140] designed a continuous compliance awareness framework with the help of AI technology that alleviates potential risks during the earlier manual auditing, including a low level of accuracy, efficiency, accountability, high expense and laborious and time-consuming. This system automatically audits the organization's purchases by intelligently understanding compliance policies using text extraction technologies, automated processing methods, and report rating systems.…”

Dynamic capabilities for digital procurement transformation: a systematic literature review

“…Less labor is required in procurement, as is a shifting of resources from operational to strategic activities, where human decision-making is visible. Buyers that adopt, for instance, AI in their processes become faster, more reactive, and more efficient, thereby freeing up time for more strategic tasks (Wang et al, 2020;Colombo et al, 2021).…”