Ethical Implications of AI in The Business of Auditing Essay Writing

Individual Research Essay

This research essay is based on the academic article-The Ethical Implications of Using Artificial Intelligence in Auditing by Munoko et al, 2020 in the Journal of Business Ethics. The article is available through the link below.

Munoko and co-authors write about the ethical implications of the increasing use of Artificial Intelligence (AI) in carrying out routine audit tasks which were previously carried out by human auditors. They suggest that the rapid and increasing use of digital technologies such as AI is a high-risk activity as the significant impact of uncertainties related to the technology is not fully known. In fact, they argue that ethical issues related to the use of digital technology will only become known fully after the technology has been in use for a while. AI uses algorithms to program and carry out cognitive tasks previously conducted by humans and this programming is based on assumptions that can be faulty and lead to errors and other major adverse impacts. In addition, the implementation of AI may obscure changes in procedure which lead to adverse outcomes - an example, the robot debt issue faced by the Federal government recently.

AI is used to perform traditional procedures in auditing and accounting such as review of general ledgers, tax compliance, preparation of work papers, expense compliance, data analytics, and visualization and fraud detection. The use of AI for this work is governed by many assumptions such as the accuracy of work performed by AI, AI behavior will remain within established constraints and any divergence or incorrect work will be picked up by humans and rectified. However, these assumptions may not always hold. Therefore, Munoko et al investigate the potential ethical issues that the audit profession should consider as they adopt AI technologies. They also examine other issues such as the ethical governance of AI within auditing firms, how AI is changing the social practice of auditing, how auditing is carried out by humans and AI, and how the use of AI impacts the professional responsibilities of auditors. They draw on two established and emerging AI ethical frameworks to carry out this investigation. They broadly conclude that AI and related digital technologies have an important and growing role to play alongside humans in audit work. However, they argue that the profession of auditing and all key stakeholders need to agree, design, and implement practical guidance for the governance and use of these technologies to prevent ethical, legal, and financial issues arising that adversely impact audit firms, clients, and the general public.

Deliverable

Write a 3,000-word individual research essay on the ethical implications of AI in the business of auditing. Your essay should consider:

• Whether the risks raised by Munoko et al 2020 in relation to the use of AI in the field of auditing are valid;
• Whether the approach/es Munoko et al 2020 propose to address the risks of AI in auditing is appropriate;
• Whether there are other risks regarding the implementation of AI in the field of auditing that Munoko et al 2020 did not address in their article, and if so, how should we address these risks?
• Whether there are any other frameworks that may be more suitable for assessing/addressing the risk of AI in auditing;
• Whether the risks posed by AI in the field of auditing are specific to auditing, or whether the risks are similar to other business areas/sectors;

In order to carry out this task, you should draw upon at least five other relevant academic articles (these are articles published in academic journals similar to the ones in the bibliography at the end of the Munoko et al paper) on this topic. You should also draw upon insights and learn from your reading and lectures. You may find the bibliography at the end of Munoko et al, 2020 a helpful starting point for finding further academic articles, but you should also undertake searches for articles on the Monash Library website.

Your essay will be enhanced if you draw on practical organisational examples to illustrate your insights. For example, when talking about a risk related to the use of AI, providing an example of the use of AI to perform a specific task will help you to make clear the real-life consequences that can occur if the risk is not addressed. You can draw from case organisations you have encountered in the Unit or draw on information from organisations you are familiar with from your network. You can also draw on white papers and reports published by accounting and consulting firms (eg: PwC, McKinsey) that deal with these matters.