SMSF auditors should be aware artificial intelligence (AI)-based tools may present material that obscures errors and creates information that incorrectly confirms those mistakes, and not to rely on the surface level quality of it, a practitioner has stated.
Tactical Super director Jacob Kewley said there were structural limits in many tools and they could not recognise data that was inputted without guidance.
“One of these limits is that a smarter model doesn’t move by itself. It only knows what it has been handed and even the most excellent answers will show that,” Kewley said during a recent webinar hosted by The Auditors Institute.
“It is important to remember that fluency is not correctness and the most dangerous answers are often the best formatted ones.
“Errors don’t arrive looking like errors anymore. They arrive in tables wearing citations nested under plausibly correct conclusions.
“AI also can’t act on doubt. Scepticism for an auditor is not having doubts, it is doing something about them, ringing the accountant, pulling the prior year, taking the actual standard off the shelf. An AI model has no arms and no phone.”
“The follow-up that turns a doubt into evidence has to remain yours. You can only trust the output to the extent you could have produced it yourself.
“This is why the conclusion can never move across the line because the models aren’t smart enough and the signature cannot be transferred any more than the risk can be.”
He said despite this, auditors can use AI and focus on doing so in three ways.
“Use AI to help you construct deterministic systems where uncertainty gets tested out during development or before any audit ever relies on it,” he said.
“Secondly, use it to prepare drafts, summaries, extracts, triage production on real work, with a human control that catches everything before it reaches the file.
“Finally, conclude that AI’s output as an audit conclusion is a line it would be indefensible to cross and its recommendations are a consideration for an auditor but never the conclusion itself.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason