Artificial Intelligence in Computer-Aided Auditing Techniques and Technologies (CAATTs) and an Application Proposal for Auditors

Abstract

Digital transformation is the modification resulting from new opportunities technological advancements in all areas of life presents. These new technologies are also used in audit activities. These new technologies used in audit activities are called Computer Assisted Auditing Techniques and Technologies (CAATTs). Those have emerged to help auditors look for irregularities in data files and to enable more analyses to be done in less time with more evidence at a lower risk level. By using CAATTs, the auditor is able to filter, define and create equations, identify gaps, make statistical analysis, identify peer records, classify, sort, summarize, merge, and match. The fact that the auditor reaches the results by analyzing the sample chosen in the audit activities may cause the concerned parties to approach these results with suspicion. Instead of selecting and analyzing samples, using CAATTs, the auditor may also analyze the entire data. Concurrent with new technological developments, the scope of CAATTs applications is also advancing. Artificial Intelligence(AI), as an automated system that can generate algorithms, occupies a center stage in these developments. It is observed that 4 concepts are emphasized for AI. These concepts are acting like human, thinking like human, rational thinking, and rational behavior. These factors facilitated the inclusion of AI in audit activities. The emergence of AI will include human-like activities in the auditing process. In general, it is considered that the technology applied to the audit allows the activities to be carried out more effectively. In reality, there are contradictions about the use of AI in audit activities. Some researchers support the use of this new technology in the auditing process, while others are skeptical. Those, who view the use of AI with skepticism, state that the professional judgment of the auditor can be ignored with the utilization of AI. For this reason, how to limit the use of AI in audit activities is discussed. Firstly, the study explains CAATTs applications and the concept of AI and how AI is included in accounting and auditing activities. Secondly, the advantages and disadvantages of using AI in the auditing processes are evaluated. Lastly, the use of AI and CAATTs in audit process and specific application suggestions for different audit areas are discussed in detail in the context of suggested audit batches.

Determinants of adoption of computer‐assisted audit tools and techniques among internal audit units in Ghana

“…This increased use has been exacerbated in the face of the ongoing global COVID‐19 pandemic because many employees are required to work remotely, with offsite auditing becoming normal. The audit literature has captured the use of CAATTs in the auditing processes both internally and externally (Ahmi et al, 2014; Aksoy & Gurol, 2021; Debreceny et al, 2005; Pedrosa et al, 2020; Siew et al, 2020).…”

“…Besides the use of fundamental CAATTs, there is growing interest in the use of AI in auditing (Aksoy & Gurol, 2021; Kahyaoglu & Aksoy, 2021). The use of these technology‐based algorithms dwells heavily on big data to ensure high precision and predictive capabilities.…”

“…Information technology (IT) adoption and application in the corporate environment has been researched globally since the 1980s but has seen a significant surge within the last two decades (Aksoy & Gurol, 2021; Pedrosa et al, 2020; Rad et al, 2018; Sharma et al, 2021). The automation of business processes has resulted in reductions in operational costs while enhancing efficiency.…”

“…The automation of business processes has resulted in reductions in operational costs while enhancing efficiency. This has led to advancements in the speed of transaction processing, cost savings, and reduced inefficiencies caused by human errors (Aksoy & Gurol, 2021; Lois et al, 2020; Pedrosa et al, 2020; Sayana, 2003; Siew et al, 2020). Computer‐assisted audit tools and techniques (CAATT) include the “tools and techniques employed by auditors to extract and analyze client's data of audit significance in a firm's information systems” (Braun & Davis, 2003, p. 726).…”

“…This study explores them further using a robust empirical approach. Yet, there are some notable benefits that we can identify with using CAATTs and there are also clear implications for using this innovation in internal audits (Aksoy & Gurol, 2021; Pedrosa et al, 2020; Sayana, 2003; Siew et al, 2020). CAATTs help auditors to conduct analytical procedures and other tests more efficiently and effectively.…”