Brian Tankersley, CPA, and Randy Johnston, discuss artificial intelligence (AI) innovations in the auditing space, and the ways firms and professionals are adapting them. Watch the video, listen to the audio, or read the transcript.
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Transcript (Note: There may be typos due to automated transcription errors.)SPEAKERS
Randy Johnston, Brian F. Tankersley, CPA.CITP, CGMA
Brian F. Tankersley, CPA.CITP, CGMA 00:00
Randy, welcome to the accounting Technology Lab sponsored by CPA practice advisor. With your hosts, Randy Johnston and Brian Tankersley,
Randy Johnston 00:11
welcome to the accounting Technology Lab. I’m Randy Johnston with my co host, Brian Tankersley. And you know, Brian, for years, has introduced himself as a recovering auditor. He’s been an external and internal auditor, and you know, so I’m going to defer some of the insights to his expertise today, but what we wanted to talk to you about was the tools that are allowing AI powered auditing. Now I had the privilege of producing an AI audit session for Walters Kluwer and CPA practice advisor on May 19, which I believe is available for your review also. But one of the slides that I built for that particular session was what was possible with AI auditing, and we’re seeing machine learning being used to detect anomalies and fraud far more often, and it really does help your junior staff reconciliations are becoming automated far more and a lot of the routine automations in audit are handled as well. And what is a benefit here on the AI tools is they’re reducing the manual work and increasing the accuracy. So many of the tools that we’ll talk about would be like PBC tools to gather data easier. So you had your traditional tools like shurelink, but you’ve got new AI powered tools like audit board, for example, and you know, the extractions are becoming far more accurate. You know, Brian and I both were introduced to Validus when they first arrived here in the United States. And it’s been interesting to watch Jeff Gramlich join them. And, you know, come become present CEO there. But a lot of the anomalies, they’re doing great things, they are doing great things, and a lot of the anomalies get identified so forth. And what we’re doing is we’re allowing professionals to focus on audit tasks as opposed to menial labor. Now the evolution is in process for cloud based platforms and AI solutions for collaboration, so there’s less worry about, you know, carrying access points and hubs and all that mechanical stuff that we did 10 years ago for field teams on audit, because a whole lot of things are changing an audit, better data ingestion, better data analytics, a lot of AI resulting in the data driven audit. And, you know, as we’ve implemented, or almost have completed implementation, implement, implemented quality of quality standards, you know, there’s many other things that are changing now, and we believe that AI is transforming audit judgments, because about 60% of the firms in the US are investing in AI for audit efficiency and accuracy. And you could use large language models like generative AI, but the AI is now being built in to the platforms. So the mainstream platforms today, cch engagement, at a point in time, had about 85% market share here in the United States, and cch has their access engagement platform running and many industries covered at this point. Of course, Thomson Reuters has evolved from advanced flow into engagement manager, backing that up with their guided assurance. You know, that’s how the PPC smart tools evolved into, you know, guided assurance. And, of course, HG capital invested in CaseWare, in CaseWare cloud. So we’ve got the major players for platform. Now there’s some new players for platform coming along as well. Field Guide, inflow, audit site, are all examples of additional platform plays. So Brian and I have, I think I learned this from Brian, and now I act like it’s my own idea. Have come up with the concept that most of you who have audit platforms really convert only the year after your peer review is completed. So you know, first I’d like for you to think about when your peer review is complete, and then consider the timing for your audit platform change. Now with this SARS 27 I think change in April where client accounting services, financials don’t have to be peer reviewed. At this point, assurance work and audit work in particular, has become a little more separated. Now my last little bit of claim here is we both. Believe that there are tools that can give leverage to your audit team. Examples In the Employee Pension Benefit area would include things like audit minor from Kelly man or the awe tire team’s tools. You know, attire has done a nice job on that as well. And there’s others that we’re going to try to make you aware of. But the common thread here that I’m trying to get you to pull is there’s AI power in the audit tools to consider. So Brian, way too long of a bloody setup when you’re the expert in the room. But what have I not covered in the audit platforms? And you know, some of the up and coming items.
Brian F. Tankersley, CPA.CITP, CGMA 05:44
It just feels like to me, from what I’m seeing, that the the audit of the entire populations, you know, the 100% testing is, you know, is really something that’s possible with these tools. And so I think we’ve got to acknowledge that, that I fully expect some changes in standards to mandate more of that testing on it in the future, but, but I think also we’ve got to make sure that we’re not, you know, got to make sure that we’re we’re trying to use the automation and to let it do What, we need to get done in here, as opposed to trying to do things the same way. You know, I think back to my own audit career. And, you know, I go back to an engagement 20 years ago where I had a managing partner that insisted that he wanted to input the trial balance, because he saw analytics. He saw things in the analytics as he entered the data, and that’s just the wrong answer, okay, on so many levels. And so it’s, you know, with these things, we’ve got to really let the technology do its work, and we’ve got to get we’ve got to audit the auditing that it does, the audit the AI, and see if it’s finding the things that we expect it to but, you know, generally, I think that this kind of stuff is is important, and it is becoming more important. And I think the standard of care that’s out here is is moving at breakneck speed toward requiring these kinds of things.
Randy Johnston 07:21
Yeah, so you know, you are absolutely right, Brian, when you consider this 100% auditing versus statistical auditing, I believe, and you can correct me on this, but I believe it was 2016 that you presented for the boomer circles saying it was going to be 100% and you came up with a beautiful, you know, digital exhaust model at that point in time, but this concept of 100% auditing, I think, is doable down to capturing at the edge. Now, I’m a little less optimistic on capturing at the edge with quantum computing and internet of things than I was, but I still get the vision that we can capture at the edge, but you know, more close to home. It seems to me that the new generation tools can really help us, because the many of the tools work with all sizes of firms and all industries and all ERP types like you, you know, sided with Validus, as opposed to some that we didn’t include in our material, strongbox being the example that only connects through an API. And you know, if you consider efficiency and increasing quality, reducing the firm’s risk and being able to sell more profitable work, those are all pretty important deals. But I also recognize that if you are not producing gas compliant work papers, you have potential of a peer review risk, which many of you think haven’t probably thought about enough in my mind now to drive a lot of this, there’s new generations of audit support tools that are in the market as well. And here the we think that many of you will choose to purchase your guidance from your platform supplier. So therefore, with access engagement, you’re likely to use access knowledge coach and with engagement manager, you’re likely to use guided assurance replacing what was checkpoint engage or PPC, smart tools in the past, we think that you know your extraction tool, like data Snipper, which can actually do tick and time marks On financials. You know, is is a good tool, but with the radically increased pricing after private equity purchase by data Snipper, I’m probably less PRO data Snipper than I was, still a great tool, but oh my, it has become so much more expensive. And when you look at a. You know, like the CCH document linker, which has comparable capabilities at far lower cost. You know, you I hesitate, but also with our audit teams, we have the issues of, you know, scheduling. So it’s where, you know, the pro staffs and the WSG Empire suites and the BIS and the day shapes come into play. But when it comes to the portal pieces, you know, the extractions done by valid is and validate and truly in I think all have merit for your work paper support. So, you know, Brian, there’s a lot of other up and coming tools in this space. But what would you say about the audit support tools? And we’ll list some more AI based tools in just a minute,
Brian F. Tankersley, CPA.CITP, CGMA 10:50
you know? I think it’s, you know. I think when we think about, you know, the mind bridges and some of these others in here, I think it’s, I think generally, we’ve got to move beyond some of the some of the legacy applications, and get things set up to where they’re more they’re on more modern platforms with APIs and other things like that. You know, it’s kind of similar to what we said in the in in the in the accounting space, in that we can do AI based reconciliations, and we can do other things like that. So, you know, in the past, we might have tested reconciliation now we can actually re perform with AI without using that much computing power. So as we’re as we’re thinking about this, there are a lot of tasks and a lot of there’s a lot of re performance of tasks that we can do now with AI that we never considered doing before because it was just wasn’t economical
Randy Johnston 11:48
well. And you know, to that point, Brian, you know, there’s things that AI is doing for auditors that I think is important. I think there’s a lot of manual work being eliminated. I think the data accuracy is approaching 100% this security of the data can be strong. It can minimize the firm’s risk, and it can actually increase your internal margins on these jobs. You know, historically, we’ve talked a lot about, you know, utilization and realization on audits, and a lot of firms really struggle with the realization numbers, but with these tools, I think you can actually improve it. And you know, another key piece in your 100% auditing claim is, I think continuous audit is also very likely, in other words, 24 by seven. So if you think about AI audit tools as being a bridge from the past to the future of audit, I think that’s a pretty good positioning on this and and you’ve got to have tools that are linked to the source data that produce gas compliant work, I think to really have the full benefit of these, you know, this new environment, and, boy, there are so many audit tools that we could, you know, dig further on. But I can, I can still recall clearly when I was in your office in Knoxville, when Chris McCall demonstrated validate to show how they could chase down transactions for litigation support and fraud and surface it all, it’s like, oh my, that is amazingly, stunningly good. But you know, in terms of other audit tools, I think there are four or five or six that we want to call out for you. And Brian, I might have you back up just one piece there, because truly on is clearly doing one of those. But audit PAL is another one doing that. The people at assurance prep have also released a product called audit intelligence. We’ll close up our time together on a little bit more. Of course, mindbridge was one of the first ones in this space, and the Thomson Reuters audit intelligence analyze is another one that you know was a an outcome of the materia acquisition. And now that Dave Weil is running that team at Thomson Reuters, that’s a pretty big benefit. But now there are at least another eight or 10 platforms that we want to just call out. And so Brian, I’m going to name them quickly for our listeners and then let you react to a few of these. But for example, the teammate document, Lana clinker from cch I named earlier, the debt book product for Debt and Cash and lease statements of position, vigilant for data gathering time. Credit agentive is a very interesting tool for testing audit evidence. Of course, the material tool. Now audit intelligence analyzed by Thomson Reuters, I mentioned just a moment ago the Workiva product for ESG and GRC reporting the audit board product I named early in this session with some risk management and audit automation features, those guys have built a very nice little product over the last 10 years or so. And of course, you’ve got Digilent one, and then the Daniil product, which I mentioned in the CAS session on AI for quality of earnings, which fully automates data collection. So this isn’t even all of them, and I can, I’ll just comment here that Brian and I get the good fortune of working together, but we don’t get to talk as much as I’d like. But in the fourth quarter of 2024 when he and I concluded that there were over 10 audit AI products, over 10 tax AI products, and 20 plus CAS products, when we began working here in 2025 we realized that the our numbers were too low. There were just so many new products. So Brian, I’ve really named, you know, 10 new AI based products related to audit. So are there any ones of these ones I just name that you know deserve an extra call out
Brian F. Tankersley, CPA.CITP, CGMA 16:22
that Walters clue, or, you know you’ve talked about the teammate document linker, but I think it’s all that in a bag of chips, and I think it’s one of the more amazing tools for integrating the the unstructured and semi structured tool data like invoices, and turning it into useful information, things in there. You know, debt book is, again, for in the governmental space, in my mind, is a big deal for the clients to have to push them in that direction. It will help manage a lot of those, a lot of those specific things that we have to do related to that, you know, but, but again, there’s there. There are a lot of, a lot of things in here, you know, I actually one that you didn’t list up here on this in field guide. I find interesting in that, in how it it maps, it does a kind of a crosswalk of the of the steps that you’ve done under, you know, for a SOC audit, or for an SSA, you know, or some, some other kind, other kinds of compliance type audits and maps those over to the to the general audit. So I think there’s a, there are a lot of different tools out there, you know. I think, I think one of the things that you’ve got to do, if you’re in practice today, because, again, to have this many new tools is big thing. We review them and we’ll talk about them in here. Okay, but I think you’ve got to have somebody look at the I think you’ve got to have assigned managers, or senior managers or partners. I think you got to take webinars on a lot of these things, just to look at them and to see how they might, how they might be used in your practice to increase efficiency. Okay, you know, if you’re just sitting in your office, not doing much of anything at lunch, why not take a webinar on teammate analytics or on materia or on audit board or denial or vigilant, or, you know, one of their agentive or one of the others out there, because AI and the technology that’s that’s out there today are really changing just about everything and making things possible. And the problem is that you know, even if you buy the right technology, if you don’t have the way it works and the way you have a vision that 30,000 foot view of what you want it to do. It’s not going to do that for Okay, so it’s, it’s important that you partners that are living life six or 15 minutes at a time with your fastidious timesheets. It’s critical that you get out there and throw some R and D time at this, because these these tools, are really doing things that can, they can let that can help you rethink the whole way you do some of these jobs, and help you do them better with with fewer hours and with more effectiveness.
Randy Johnston 19:17
Yeah. So interesting. You’d, uh, pull out again Field Guide, because Jin Jiang and his team at Field Guide have been moving their platform closer to a full audit platform from the SOC and SSAE audits that they specialized in initially. And you know, Field Guide and inflow are two platforms that are making good progress. You know, Mark Edmonds
Brian F. Tankersley, CPA.CITP, CGMA 19:42
should have said settled more about inflow, because it’s they’re really starting to, starting to get significant traction in the US.
Randy Johnston 19:51
Yeah, they are. And, you know, Mark Edmondson and his team are doing a good job with that platform as well. So, you know, this is not the tradition. No audit tools that you were used to, but I do want to maybe illustrate now with just one specialty tool. This is auditor intelligence from assurance prep. And you know what auditor intelligence did try to streamline audit execution for you, and they did a pretty nice job of covering multiple different functions there. They got started on this because of audit quality. They were trying to improve realization and utilization. They use your methodology, your existing technology stack, and they basically are kind of a workflow tool to guide your audit team through each stage of an engagement. They help automatically complete various audit procedures. Now notice that automatically completes a big deal and it does create work papers using your firm standardized templates. So what type of functions are covered? Well, there’s loosely eight of them. But if you look at they the key functions they do, they ingest data, they automate each section, and they create the work papers. And so what type of functions can we cover? Well, for example, reconciling cash and doing a R, A, P or inventory, accuracies, doing capital, assets, doing debt and doing expenses, are all various functions that they do, as well as test of detail. So you know Brian, I know people who are using this product right now report that their efficiencies are way up because things that have been traditionally done by staff are being done by the audit automation by the AI. So generally this this platform, for example, is reducing the engagement hours and reducing the man manual labor with AI. And you know, if you then consider audit quality that comes into place and profitability comes into place. So all of those things said, Brian, you know, there’s, there’s many changes in audit. So any parting thoughts for our listeners on the AI in audit. I
Brian F. Tankersley, CPA.CITP, CGMA 22:22
think I’m going to go back to one of my favorite Mark Twain quotes, which is, the rumors of my death are greatly exaggerated. And I think that’s the case with audit. I think audit is is experiencing a renaissance now, and there are a lot of things that are that are changing, that are making it better, that are making it possible for you to do, you to do more work, more work, more effectively with less. And I think it’s, you know, I think it’s a time again to have a look at things and see, see what kind of changes you might want to make on this, you know, audit changes to audit methodology and changes to audit procedures, you know, generally happen at gunpoint or during a peer review meeting where where somebody says you have to do this. And, you know, I think it’s time to, I think, I think you would do well to voluntarily consider some of these tools out there and how they might be used in your practice to make things better and again, just to take again, a partner level view, a holistic view of the jobs and the work that’s that’s involved in those and try to figure out, try to figure out again, how you can make the most of things and be better, because the, you know, all knowledge work is changing in this era of of cloud based technology integration and AI, and I think it’s, I think that many times in the accounting profession, we act like We’re immune to these mega trends that are happening. But I think, you know, in the audit space, I think we really have to reach out and try to try to make things better before we do get left behind. Okay, because it’s a it, it. Things are really changing that rapidly right now. And you know, if you’re, if you’re, if you have adjusted to some of these changes, then you you may not be ready. I mean, the bad guys are still getting better. You know, they’re using AI for all kinds of purposes. So I think it’s important that the good guys use AI as much too, to try to offset the improvements the bad guys are making.
Randy Johnston 24:42
Well, we appreciate you listening in to the accounting Technology Lab. We’ll talk to you again soon. Good day.
Brian F. Tankersley, CPA.CITP, CGMA 24:50
Thank you for sharing your time with us. We’ll be back next Saturday with a new episode of the technology lab from CPA practice advisor. Have a. Great week. I.
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Mark Johnson August 11 2025 at 10:54 am
Surprised you didn’t mention AuditFile, the company that pioneered the AI-enabled audit. I’ve used it for over a decade.