Implications of Artificial Intelligence on the Objectives of Auditing Financial Statements and Ways to Achieve Them

Abstract

Artificial Intelligence (AI), thanks to its application in auditing financial statements, has exerted profound implications on audit objectives and ways to accomplish them. In the past, however, confined by then-available technologies in the profession, objectives of auditing financial statements were circumscribed within the conformity to the generally accepted accounting principles, via accounting inspection as the only approach. With the advent of AI technologies, objectives of auditing financial statements shall be positioned on the assurance of the reliability of accounting information rather than the conformity of accounting reports to the fundamental principles of reporting preparation standards. When striving for such audit objectives, auditors shall adopt more independent assurance methods other than restrict themselves within the scope of accounting inspection. Audit propositions shall be derived from the auditing purpose and objectives. Audit evidence shall come from more comprehensive and independent channels, such as expert conclusions. By introducing the conclusions as a new kind of evidence, we may take the advantage of AI technologies to build a deductive inference model that is scientific and comprehensive.