Could this AI audit programme revolutionise the mid-tier market?

Could this AI audit programme revolutionise the mid-tier market?

A partnership between Canadian company MindBridge Ai and Kreston Reeves is creating the next generation of audit for mid-tier firms

The audit market is the subject of several reviews, with the market share of the Big Four under scrutiny from the Competitions and Markets Authority, the BEIS Committee, and others.

But while regulatory change seems inevitable, technology could allow so-called mid-tier firms to compete with the Big Four even before that happens.

Canadian company MindBridge Ai has developed an artificial intelligence-based audit platform, Ai Auditor, which is designed to be accessible by accounting firms of any size and their clients. This is allowing UK firm Kreston Reeves to apply increasing levels of data analytics and enhanced insights to the audit process.

“This is a new area for us. It is important for us to be able to offer the added insight and reassurance provided by the results of data analytics when we’re talking to clients,” says Peter Manser, head of audit and assurance for Kreston Reeves.

Cutting edge machine learning and AI has been customised for the audit process, to learn from the transactions it is fed. Ai Auditor analyses all the data from a client’s accounts to categorise transactions as low risk, medium risk or high risk. This is a departure from manually conducted audits, which have traditionally been based on a statistical sample, exposing auditors and finance teams alike to the risk of missing red flags.

“We’ve developed a series of algorithms, called control points, that can be as simple as decision rules or as sophisticated as the latest AI and machine learning techniques can give us,” explained MindBridge Business Development, Marketing & Sales Growth Operations executive John Bednarek. “This included interviewing leading auditors and accounting experts to tell us what to look for, and we built these algorithms based on their input.”

The accountant can view all transactions on a central dashboard, click on any one and all the control points will be listed. That means an explanation is always shown for the risk classification each transaction has received.

This has the real benefit of leaving more time for analysing the results and producing strategic advice on that basis – adding more value for clients, and more strategic insight for accountants.

Client reaction

“We shouldn’t be afraid of the changes that this kind of technology will bring,” Peter Manser says. “If anything, we are excited at the opportunities to apply higher levels of analytical skill and insight, as we roll this out to increasing numbers of clients.”

“The twin main benefits we have seen so far are an improvement in the quality of the audit, and in being able to offer something extra to existing clients. It was also attainable at a realistic price point, despite the belief of many firms that this kind of technology is out of reach to any but the Big Four.”

Kreston Reeves has now been using MindBridge Ai Auditor for 18 months, and has already received some positive feedback from clients. One of the benefits is the way the platform allows users to visualise data, producing graphs and reports which can be shown to clients at audit committee meetings to illustrate trends or issues. These have a specific focus, including visualisations on performance and risk.

The AI can also perform trend analysis that covers several years. Peter Manser said that client reaction so far has been ‘the more of this, the better’, with the use of data analytics providing clients with further comfort over their finances – and the visual data provides real potential for discussion.

The audit process of tomorrow

MindBridge allows an initial period of time to get to know the system, known as Explore and Engage. This can be useful for firms who are about to take the plunge and start using this kind of technology for the first time, but are not yet sure what it can do. MindBridge also helps with on board training wrap-up after this period has passed.

Aspects of the programme can also be customised to suit the needs of specific firms. The MindBridge team believes this puts them ahead of competitors offering a one-size-fits-all solution, or offerings which have not yet been fully developed.

“We call this the democratisation of AI, meaning every accountant can use Ai Auditor without needing a specialist,” says John Bednarek, of Mindbridge. “There is a lot of talk out there about competitors trying to put machine learning and AI into their products, but we haven’t seen that yet. We want to empower everyone to use AI – and many of our clients do – right out of the box. The AI revolution is here – now regulators need to catch up with technological developments.”

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

4m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

5m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

6m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

6m

Related Articles

Audit news round-up

Audit Audit news round-up

5d Chris Jewers
Mazars make the case for joint audit – Part 1

Audit Mazars make the case for joint audit – Part 1

3w Tom Lemmon
An opportunity for change in the accounting sector – a need for reinvention

Audit An opportunity for change in the accounting sector – a need for reinvention

3w Leon Kahmi, Head of Responsibility
Making the case for shared audit

Audit Making the case for shared audit

4w Clive Stevens, Chairman
Areas for audit to evolve according to PwC paper

Audit Areas for audit to evolve according to PwC paper

4w Chris Jewers
Audit - A changing game

Audit Audit - A changing game

1m Stuart A Brown, Associate director, quality and technical assurance, Duncan & Toplis
Could the separation of audit and consultancy, allowing for contingent fees to be charged for consultancy - be the solution to the audit conundrum?

Audit Could the separation of audit and consultancy, allowing for contingent fees to be charged for consultancy - be the solution to the audit conundrum?

1m Beth McLoughlin, Managing Editor
FRC audit inspection finds no improvement on last year

Accounting Firms FRC audit inspection finds no improvement on last year

1m Chris Jewers