KPMG is deepening their partnership with IBM Watson. This follows news earlier this year where the initial partnership was formed.
KPMG is focused on using the technology for audit and assurance support for now. They view that Watson is capable of this because auditing is mainly assessing large amounts of data for reasonableness. Computers are good at analyzing large amounts of data whereas humans are not.
Audits are based around sampling large populations. Computers could theoretically test a whole population in real time.
The main question that is asked when news like this comes about is – “Will the technology replace people?.” The answer is typically no because computers aren’t good at cognitive skills. IBM Watson is supposed to be cognitive and artificial intelligence. In the audit world this could easily replace people because a lot of high level audit work done by partners is typically based on simple tables prepared by staff.
If IBM Watson could compile the data and cognitively analyze it, why do I need a whole audit team? I’m not too sure.
I think auditors are going to have to start adding more value to clients other than populating checklists and determining testing samples because all that can be easily completed by high power cognitive computers like Watson.
“…is will the technology replace people…? ” To train the AI/ML model, humans (auditors) are still needed to create/update the training data set and this work is labour intensive. The training data set means the audit data and the expected outcome of the audit.