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TRANSCRIPT
Intelligent Process Automation
in Audit
Abigail (Chanyuan) Zhang
Continuous Auditing & Reporting Lab
Rutgers Business School
1
Overview
• RPA and IPA
• Audit workflow
• IPA framework
• Prototype and evaluation
• Discussion and conclusion
2
Robotic Process Automation (RPA)
• Robotic Process Automation (RPA) can run application software in the same
way that a person works with that software.
• Tasks that RPA deals with
3
Definable Standardized Rule-Based
RepetitiveMachine-readable
inputs
Intelligent Process Automation (IPA)
4
IPA
Artificial intelligence
Machine
learning
Computer
vision
Virtual
agent
NLP/NLG Others
RPA
Other technologies
Data
analyticsDrones IoT Others
“Now, with help from AI, RPA robots are learning new skills. AI enables them to
interact with UI elements to complete tasks, read and process documents,
communicate in natural language, and analyze and optimize processes.” -
UiPath, 2019
Workflow Theory
A network of workflows (Adapted from Cichocki et al., 2012)
5
The Audit Workflow
6
…
…
…
…
An Audit
Engagement
Audit
Planning
Internal
Control
Testing
Substantive
Testing
Audit
Conclusion
Framework of R/IPA Implementation
7
• Identify the primary and all the lower-level workflows
• Re-design the workflow if needed
• Identify the workflows that have already been automated, that could be automated, and that cannot be automated
Audit workflow analysis
• Utilize the existing automation tool if existed
• Automate using either RPA or AI if the task is automatable
• Include human in the loop if the task is not automatable
Close the inner loops • Use RPA to
close the outer loop (i.e. complete the primary workflow)
Close the outer loop
Framework of R/IPA Implementation
7
• Identify the primary and all the lower-level workflows
• Re-design the workflow if needed
• Identify the workflows that have already been automated, that could be automated, and that cannot be automated
Audit workflow analysis
• Utilize the existing automation tool if existed
• Automate using either RPA or AI if the task is automatable
• Include human in the loop if the task is not automatable
Close the inner loops • Use RPA to
close the outer loop (i.e. complete the primary workflow)
Close the outer loop
The “Auditor-in-the-Loop” IPA Ecosystem
8
Auditors
Structured audit
tasks
Unstructured
audit tasks
Semi-structured
audit tasks
• AI/cognitive
computing
• Other
• AI
• Other
AuditorsRPA
RPA
Pre-SEFA
Testing
DCF
Standardization
SEFA Testing
Planning
Procedures 4
Planning
Procedures
2&3
Planning
Procedures 1
Bot completes
SA 434
(Planning
Worksheet)
Auditor
Auditor AuditorReview and sign Finish SA434.1/2
Add other major programs
Finish Testing summary Auditor
RPA prototype in audit planning - real case study
Workflow analysis:
Fill in a planning worksheet using information generated from a series of simple
analytical procedures and auditor’s professional judgement.
IPA prototype in audit – simulated case study
• Workflow analysis
IPA prototype in audit – simulated case study
• Close the inner loop
IPA prototype in audit – simulated case study
• Close the outer loop
IPA prototype in audit – simulated case study
15
Evaluation
Tested the bot 10 times on Rutgers CARLab server
The average time spent by the bot is 1:34, compared to 5 min needed by human
16
IPA prototype in audit – simulated case study
Conceptual Model of IPA in Pension Audit
17
Run testing queries (RPA)
Further analysis
(DA or AI)
• Process the pension
contract and extract
relevant information (NLP)
• Populate the data into DB
(RPA)
• Clean, standardize and
extract data (RPA or
NLP)
• Populate data into DB
(RPA)Plan Doc
12
Raw client data
AuditorsInvestigate
6
Report
Automatically generate testing
report (RPA and NLG)
Notify (RPA)
3
4
5
IPA Facilitates Continuous Audit
• IPA provides new opportunities for the existing manual work in
external audits to be automated
• The automation facilitated by IPA provides chances for external
audits to be conducted more timely
• IPA is non-invasive, so the data acquisition in real time is expected
to be easier and to get less resistance from the client.
18
Discussion
Where to implement AI?
– Not where “professional” judgements are needed
19
Conclusion
• IPA could achieve flexible, scalable, and intelligent process
automation in audit.
• Auditors’ work will be further shifted to the part that needs their
professional judgement.
• IPA could enhance the efficiency and effectiveness of audit
• IPA could facilitate continuous audit
20
Please contact me at:
21
“If we knew what it was we were doing, it
would not be called research, would it?”
-Albert Einstein
“Think-Feel-Do” loop of IPA
22
Drones, NLP, IoT, etc. PPA/RPA
AI and
cognitive
technologies
Human
Think
DoFeel
The Audit Workflow Driven by IPA
23
Smart
workflow
Smart
workflow
Smart
workflow