Where tech fuels speed and talent provides direction

Beyond the hype of the moment, Artificial Intelligence (AI) and Machine Learning (ML) are true game changers to analyse vast amounts of data.

Our alliance with MindBridge provides us with an AI-powered transaction scoring solution with both rule-based algorithms and unsupervised machine learning techniques that recognize patterns in clients’ data. These point to individual transactions which look unusual or suspicious based on the detected patterns and are also very powerful in obtaining laser-sharp risk assessments. In short: it helps us find a needle in a haystack.

The value of this approach lies in combining the technology with our (expert) understanding of a client’s business and processes: this results in enhanced audit quality and offers our clients valuable insights into their data.

The other benefit of AI is that it helps to automate mundane tasks. Optical Character Recognition (OCR) and AI algorithms support us in vouching various documents – invoices, receipts and other documents – automatically, matching them with the corresponding entries in a client’s accounting system. This also contributes to higher quality audits as it eliminates human error and frees up auditors’ time to focus on more complex and judgemental tasks. 

We do not know what the future will bring. But the recently announced KPMG multibillion dollar commitment in Microsoft cloud and AI is very promising and we are thrilled to see how the KPMG Clara platform – our digital audit backbone – will further evolve to unleash the power of AI into our audits.

The increasing volume, velocity, and variety of data generated by businesses enables new approaches to auditing.

KPMG Clara analytics (KCa) is our data and analytics engine that empowers KPMG Clara, our digital audit backbone. KCa can handle and analyse vast amounts of structured data more efficiently, uncovering insights that were previously unattainable.

One example is that we have identified bottlenecks and process improvements by analysing companies’ procurement data.

Another recent example is the extraction and wrangling of massive global data sets that have ultimately reduced client disruption, increased audit quality, and brought new perspectives on compliance. The power of the solution was visible in how we analysed huge global data sets in record breaking time. The result – one of the fastest reporting global clients – would have been virtually impossible with traditional audit approaches. 

In addition, we generally use technology to automate the analysis of unstructured data such as text files, images, audio and video, social media, etc.

OCR and Natural Language Processing (NLP) can convert unstructured into structured data and analyse it to identify and summarise, for example key terms, conditions and other relevant information of clients’ contracts. NLP also aids in performing a sentiment analysis over textual data, such as social media posts, customer reviews, or clients’ reporting to the financial market and turn it into insights and actions.   

We expect to get even more value out of these technologies in the near future, while many organizations now invest in data lakes that combine financial and non-financial, structured and unstructured data in one place.

This exciting development paves the way to deploy various analytics and data processing tools. It will surely lead to increased collaboration and more innovative use of data in the future.

Over the years, the options to access client data have improved, fuelled by cloud technologies and Application Programming Interfaces (API).

One of the effects is that it allows us to analyse financial transactions and controls more frequently, and eventually in real-time. The timing of audit procedures shifts from point-in-time to over-time. Continuous auditing helps us to identify and address issues more promptly, allowing our clients to course correct in good time. No wonder it conquers the hearts and minds of auditors and clients. 

Continuous auditing is no longer a dream but has become reality, especially now that we are making considerable progress by embedding our proprietary analytics into company own systems. Our audit teams have real-time access to the output of the analytics, sharing timely observations with our clients and spreading the audit efforts across the year.

Emerging technologies can bring significant benefits to our clients’ businesses, making them more efficient and competitive. However, they can also introduce new risks, such as an enhanced risk of cyber-attacks.

As auditors, we assess new risks that are introduced by deploying these solutions and evaluate control organizations put in place to mitigate such risks. All these tools and innovations will however result in high investment costs for auditors.

One particular area is where clients introduce AI, ML, robotic process automation and other technologies into their financial reporting process and internal controls framework. We can provide assurance over these solutions and have also developed an “AI in control” methodology for the assurance of AI systems.

Blockchain technology can play a key role in automating and streamlining the accumulation of non-financial data, which is very important in the light of developments around environmental, social and governance (ESG). Stakeholders, including investors, regulators and broader society, demand more transparency and accountability and yet again technology will be essential in assurance over these non-financial data.

The beauty of blockchain is that it provides a transparent and immutable record of transactions. This can be used to create a transparent and traceable record of a company’s ESG performance, such as its carbon emissions, supply chain practices, or social impact initiatives. 

When this technology is used, we as auditors can ensure that all information coming onto the blockchain is accurate and complete before being published in the shared ledger. 

KPMG is a frontrunner when it comes to transforming the audit to better serve public interest and bring value to our clients. Speaking to some of our colleagues around the world in the following videos, you’ll learn about artificial intelligence, technology assurance including cybersecurity, continuous auditing and big data.