Can Organizations Afford to not use Augmented Intelligence for Audit Management?

By Dorian Selz, CEO and co-founder, Squirro

Audit management is one of the most important tasks an organization must undertake. It helps companies – especially those in the most heavily regulated sectors such as finance, pharmaceuticals, food and drink, and chemicals – comply with regulation and avoid the penalties that come with non-compliance.

However, the sheer volume of data and information that must be found, collated, analyzed, and used for reporting makes audit management one of the most onerous tasks in business. Small armies of audit teams spend hours and hours sifting through information, and usually, they are unable to look at anywhere close to all of the relevant data.

This is why audit management software has emerged, to automate elements of these processes, delivering more effective audit management and saving enterprises precious hours and resources. Yet audit management still requires human input and intelligence, which is why audit management software is most effective when it is based on augmented intelligence.

Working with unstructured data

People rightly talk about the value of data to an organization. That’s certainly true in theory. But in reality, most organizations use only a small fraction of the data available to them. That’s because the most insightful data is unstructured and much harder to manage and work with.

That’s very much the case with audit management. Any audit team beginning the audit process will need to wade through reams of reports, board meeting minutes, call transcripts, written correspondence, and more. Not only is this all unstructured, but it is also often siloed, stored in different repositories and systems across an organization. When viewed in isolation, data lacks the full context and does not deliver the same level of insights.

This is a classic ‘needle in the haystack’ scenario for audit teams. Finding what they are looking for is time-consuming and tedious. Those time constraints also mean they are unable to look into much more than a small percentage of that data.

Audit management and risk analysis

Given the penalties for non-compliance with some regulations, risk analysis has become an essential element of an audit team’s remit. But if they are working with just a small amount of an organization’s data, how effective can risk management and mitigation be? Executing the audit process quickly and effectively to a high standard reduces the risk of non-compliance and provides insights into potential problems or issues.

Another task that falls under the responsibility of audit supervisors is to write reports for both internal and external audits. They need to justify their actions fully, and a failure to do so has consequences.

Automated audit management software might be able to find the information but won’t provide the full context. There are shades of grey with compliance, which is why humans cannot be excluded from the process. They need to be enhanced, not replaced.

The role of augmented intelligence

Augmented intelligence-based audit management software is transformative, utilizing all the benefits of automation without overlooking the vital role of humans in the process. The right solution can work with all regulatory data, whether structured or unstructured, applying different case and topic classification techniques so that audit teams can find that needle in the haystack within minutes.

Not only is this infinitely quicker, but it’s a more consistent and effective approach. Augmented intelligence also helps greatly with the analysis. Because it offers an entirely contextual view of data, it can assess the risk exposure and risk probability.

It will present this information to supervisors, providing guidance on the best course of action and whether a regulatory compliance obligation is met or not. Crucially though, it will leave them to make the final decision.

Augmented intelligence also plays a significant role in reporting. Augmented intelligence-based solutions allow experts to take notes and export them directly into reports, improving accuracy and saving time.

The future of audit management

Given the importance of audit management, the consequences of regulatory non-compliance, and the sheer volume of hours it takes, it’s little wonder that automated audit management software solutions have emerged. But automation alone does not necessarily mean more effective audit management.

It’s augmented intelligence-based solutions – human intelligence enhanced by computing power – that are most effective. Augmented intelligence improves the quality and efficiency of audit management, significantly reduces the hours spent, and frees up the audit team from routine tasks to focus on more strategic work such as risk identification, justification, and reporting.

As regulatory compliance requirements grow over the coming years, the demands on audit teams will grow alongside them. That’s why the future of audit management will be based on augmented intelligence.

About the author

Dr. Dorian Selz is CEO and co-founder of Squirro, which helps organizations such as the European Central Bank and Standard Chartered to extract actionable insight from unstructured data.



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