Artificial Intelligence – Enhanced Machine Learning.

Artificial Intelligence – Enhanced Machine Learning.

Cognitive technology – also called artificial intelligence – is essentially an algorithm or chain of algorithms with which software absorbs information and processes it in a similar way to human judgment. In combination with automation and data analysis, cognitive technology can affect a wide range of work environments and occupations.

In digital auditing, for example, cognitive technology allows the auditor to analyze information from non-traditional sources, including social media, TV and the Internet. It can thus determine whether one of these external information directly or indirectly has an impact on the audit. In addition, the examiner can submit his own expectation for a development. The auditor may combine the information obtained with the client’s financial and other records and, through the use of advanced analysis, obtain a deeper, more robust understanding of potential risks.

Automation of Inventory Check – Drones.

Drones are often used in digital auditing. The complete application of threats is still being determined; however, it is clear that some efficiency is achieved with the help of drones, as the auditor does not physically have to appear in the warehouse for the inventory observation. Drones are suitable for a number of industries – from traditional manufacturing facilities with warehouses to mining. Similar to the way inventory counts have been controlled, drones can quickly locate a storage location, real-time inventory taking by reading QR (Quick Response) barcodes, shelf numbers, and more. perform, store the collected data and report it to the networked information platform. This not only saves the auditor time and travel expenses, but also avoids security risks depending on the industry, for example in mining.

Networking through modern communication platforms. On the one hand, modern communication technologies significantly influence the way test companies communicate with one another. On the other hand, they enable a more secure and efficient exchange of data and information between the auditing company and the clients. Contact details, task sharing, status of submitted documents, milestones and much more can be displayed on these platforms. This alone represents a big leap forward to successful project management, transparent audit progress and location-independent collaboration.


With regard to the compliant execution of the digital final examinations, the question arises as to how the new aids should be integrated into the existing test methodology and the existing national auditing standards (PS) as well as the International Standards on Auditing (ISA). Depending on the field of application and functionality of IT solutions, the test approach must be defined individually. It is necessary to determine to what extent the data used is complete, reliable and relevant, how they are used for specific audit procedures, and how the use of new technologies and relevant information, in compliance with audit and quality standards, is integrated into the audit documentation wer¬den. An adaptation of the audit standards and the associated methodology is therefore essential. The present model of sampling and other verification tests falls short in order to exploit the new technological possibilities. It is necessary to revise the guidelines for the technical aids used in good time so that the potential of digitalisation and technology can be fully exploited for the benefit of the auditees, the auditors and the addressees of the audit reports.

From the perspective of the ISA. The ISAs do not prohibit the use of data analysis per se, but the existing standards do not encourage it. Technological advancements and the increasing relevance and use of data analytics among companies and auditors have led to the International Auditing and Assurance Standards Board (IAASB) and its stakeholders currently evaluating whether ISAs will continue to meet the needs of those who respond to the report leave the auditor in a fast-paced digital world. Although today’s ISAs confirm that the auditor uses CAAT in the conduct of the audit. However, the reference to CAAT was created in the ISA in an earlier technological era.


Positive effect: Human Judgment. Human judgment or professional judgment – known in professional jargon as Professional Judgment – is a key factor that will receive even more attention in the future and remains a fundamental part of the auditing profession.

Critical attitude and professional judgment are the cornerstones of the profession. Both require the auditor to have a robust understanding of the entity being audited and its business environment. The use of new technologies supports detailed analysis and analysis of high and complex volumes of data, providing extensive insight into business data, transactions and financial relationships. With the significant positive effect that a data basis is created for the auditor of the future, which provides a profound understanding and a networked approach to business transactions and thus further increases the quality of the audit.

For the audited entities, this means that the auditor can better identify those risks that are valuable to the companies and their operational or strategic direction.