New cloud platforms use machine learning to recognize financial evidence like bank statement transactions, making testing for asset misappropriation simple.
Ask any client and most will assume auditors are responsible for identifying potential fraud. It's a common misconception. Just because auditors aren't responsible for this task, doesn't mean they don't look for it or shouldn't run simple tests to provide clients with more confidence and intelligence about their accounting operations.
As CPA firms modernize operations with artificial intelligence and robotic process automation, there's simple ways to collect more audit evidence and run simple tests to identify potential fraud and increase audit quality.
New cloud platforms use machine learning to recognize financial evidence like bank statement transactions and check images within bank statements make testing for asset misappropriation simple. These systems not only can recognize evidentiary artifacts within documents but extracts the data to map back into client accounting records. One simple report is a check payee test. Using artificial intelligence to recognize and extract the data from check images available on client bank statements, these new systems can directly compare the payee on the original check to the payee as documented in the ERP system. If they don't match, it could be a flag for asset misappropriation fraud. Audit standards don't require this level of scrutiny but for firms looking for ways to increase audit quality, this is a fast, simple way to differentiate from firms that aren't as progressive.