How Internal Auditors Can Leverage ChatGPT to Enhance Their Work

Since its launch, ChatGPT has taken the world by storm, transforming how professionals across industries approach their daily tasks. Students, writers, programmers, marketing managers, and many others rely on this artificial intelligence-powered tool for efficiency and insight. But what about internal auditors? Can ChatGPT play a meaningful role in the auditing process?

The short answer is yes—ChatGPT has significant potential to assist internal auditors at various stages of their work, from risk assessment and engagement planning to reporting. However, it is crucial to be aware of its limitations, particularly regarding data confidentiality and accuracy. In this blog post, we will explore how auditors can harness the power of ChatGPT while mitigating its risks.

Enhancing Periodic Planning and Risk Assessment

Internal auditors start their work with periodic planning and risk assessment, a phase where precision and thoroughness are key. ChatGPT can be a useful tool in this process by assisting with:

  • Refining risk assessment methodologies: ChatGPT can provide insights into industry best practices for structuring a risk assessment framework.
  • Generating ideas for risk quantification: The tool can suggest various ways to measure different risk categories based on publicly available methodologies.
  • Identifying emerging risks: By analyzing trends and regulatory updates, ChatGPT can offer insights into new and evolving risks within an industry.

However, ChatGPT cannot replace the auditor’s critical judgment. Since risk assessments are highly organization-specific, relying solely on ChatGPT for content creation or risk ratings is not advisable. Additionally, to maintain data security, auditors must avoid inputting confidential company information into the tool.

Supporting Engagement Planning

ChatGPT can play a significant role in planning audit engagements by:

  • Providing insights on potential risks and controls: Auditors can ask ChatGPT about typical risks associated with a process, the key controls that should be in place, and possible failure points.
  • Assisting in drafting audit programs: Instead of creating audit programs from scratch, auditors can use ChatGPT to generate a preliminary draft and then refine it based on organizational specifics.
  • Acting as a brainstorming partner: ChatGPT can help auditors think through engagement objectives, methodologies, and focus areas.

For example, instead of asking ChatGPT a broad question like, “Draft an audit program for a procurement process,” a more structured approach would yield better results:

  1. What are the primary objectives of the procurement process?
  2. What are the key sub-processes within procurement?
  3. What are the most common risks associated with each sub-process?

By breaking down the inquiry into logical steps, auditors can extract more meaningful and relevant insights from ChatGPT. The key takeaway here is that while ChatGPT can enhance efficiency, it should be used as a supplementary tool rather than a replacement for an auditor’s expertise.

The Role of AI in Fieldwork

At the current stage of AI development, ChatGPT offers limited utility in fieldwork. Since internal auditors often deal with highly sensitive data, inputting such information into ChatGPT is not an option due to confidentiality risks. However, looking ahead, the integration of AI-powered analytics into data tools like Excel could revolutionize fieldwork. Imagine being able to input a command like:

“Compare these two datasets and highlight all discrepancies.”

With AI-driven automation, auditors could significantly reduce the time spent on data analysis and focus more on high-value tasks such as root cause analysis and recommendations.

Streamlining Reporting with AI Assistance

One of ChatGPT’s strongest capabilities is generating clear and concise written content. This makes it a valuable asset in the reporting phase of an audit. Auditors can use ChatGPT to:

  • Polish language and enhance clarity: ChatGPT can refine draft reports to improve readability and persuasiveness.
  • Summarize general background information: If the information is not confidential, ChatGPT can help create well-structured introductions and overviews.
  • Assist with wording refinements: Instead of struggling to articulate a specific point, auditors can use prompts like:“Rewrite this paragraph in a more persuasive tone.” “Condense this explanation into a single clear sentence.”

However, as with other phases of the audit, data confidentiality must remain a top priority. Auditors should never input sensitive audit findings or company-specific details into ChatGPT.

The Future of AI in Audit Recommendations and Follow-Up

At present, ChatGPT does not play a major role in audit recommendation follow-ups due to confidentiality constraints. However, as AI continues to evolve, we can expect future developments that allow for secure AI integration within internal audit functions. Organizations that implement private AI models with strict security controls may eventually leverage AI to track audit recommendations, suggest remediation actions, and monitor compliance trends over time.

Mastering ChatGPT as an Audit Tool

Despite its current limitations, ChatGPT is a powerful tool that internal auditors should begin experimenting with today. As AI technology continues to advance, auditors who familiarize themselves with its capabilities will be well-positioned to leverage future innovations.

Here are a few best practices for auditors using ChatGPT:

  • Use it for brainstorming and research: ChatGPT can serve as a valuable knowledge resource for understanding audit concepts, methodologies, and industry standards.
  • Avoid inputting confidential information: Always keep in mind that anything entered into ChatGPT could potentially be used to train future models.
  • Take an iterative approach: The more specific your questions, the better your results. Use follow-up questions to refine ChatGPT’s responses.
  • Maintain professional skepticism: ChatGPT is not infallible. Always verify information before incorporating it into your work.

Conclusion: AI as an Auditor’s Assistant, Not a Replacement

AI is here to stay, and its role in internal auditing will only continue to grow. However, AI will never replace the critical thinking, experience, and professional judgment of an internal auditor. As the saying goes:

“We will not be replaced by AI, but by people using AI.”

By understanding ChatGPT’s strengths and limitations, auditors can enhance their efficiency, improve their workflows, and prepare for a future where AI is seamlessly integrated into audit processes. Now is the time to embrace this technology and explore how it can complement traditional auditing methodologies—ensuring that internal auditors remain at the forefront of innovation in the profession.

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