Software boss says fully automated audit 'unlikely'

Speaking to SMSF Adviser, BMR Corporate Solutions managing director Mark Ratcliff said that technology can only assist to a certain extent but cannot replace the professional scepticism of a human auditor.

He pointed out the myriad of factors affecting automation, from reviewing trust deeds to trustee declarations and investment strategies.

Even as artificial intelligence develops and makes the reality of automation handling such audits possible, Mr Ratcliff is certain that an accountant’s critical thinking cannot be substituted.

“What about the ownership of a property? Or the correct market value of unlisted shares? What about an in-house asset?,” he said.

“Automation is great, however the auditor is trained to be questioning in their thinking.

“I doubt the investment will ever be there in that someone will be able to automate all the questions – even with artificial intelligence currently.”

Mr Ratcliff’s comments echo those of Liz Westover, PwC exec, who similarly questioned the ability for audits to be ever fully audited.

“While I agree there are certain aspects of an audit that will greatly benefit from advances in technology, particularly around data feeds and access to information, I challenge the ability to fully automate on the basis that audits by their very nature involve a level of professional scepticism,” Ms Westover said.

“An auditor must use their experience and judgement when conducting an audit. Frequently, this might involve the 'smell test' or a 'gut feel' about a transaction, a client or a set of accounts. This seems to be an innately ‘human’ characteristic, which would be difficult, if not impossible, for a machine to replicate.”