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AI-Powered Internal Auditing: Transforming the Profession for a New Era

Author

Listed:
  • Muhammad Khairuldin Al Hafiz Ismail

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Wan Ahmad Aqief Muhaideen Ahmad Rajiun

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Saidatul Shahnaz Binti Mustapa Kamal

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Nurin Irdina Azmidal

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Nurfatihah Izzati Sharul Nizam

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Nur Danisha Iman Mohammad Yussop

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Muthyaah Mohd Jamil

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

  • Nur Aini Deraman

    (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia)

Abstract

Artificial Intelligence (AI) has seen widespread adoption in various sectors including healthcare, finance, manufacturing, and retail. In Malaysia, AI adoption is accelerating as the country seeks to enhance its competitiveness and foster innovation. Due to the emergence of AI in the organizational landscape, it has brought in change paradigm in the internal auditing profession. To remain effective, internal auditors must quickly adapt and capture AI capabilities into their work routine. This paper reviewed 31 journals published from various reliable academic resources. Three themes have been established: the roles of internal auditors, the benefits to internal auditors of adopting AI and the challenges of internal auditors in using AI for fraud detection. This paper highlights several roles of internal auditors using AI, it also highlights the benefits of adopting AI in the fraud detection process. The most prominent benefit of using AI is its ability to conduct real-time fraud detection, provide wider coverage, automate repetitive and labor-intensive tasks, and improving detection through its predictive analysis capability. Along with these advantages, this paper also discusses the significant challenges internal auditors run into when integrating AI into fraud detection, highlighting the difficulties in adjusting to this cutting-edge technology.

Suggested Citation

  • Muhammad Khairuldin Al Hafiz Ismail & Wan Ahmad Aqief Muhaideen Ahmad Rajiun & Saidatul Shahnaz Binti Mustapa Kamal & Nurin Irdina Azmidal & Nurfatihah Izzati Sharul Nizam & Nur Danisha Iman Mohammad , 2024. "AI-Powered Internal Auditing: Transforming the Profession for a New Era," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(10), pages 2406-2413, October.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:10:p:2406-2413
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    References listed on IDEAS

    as
    1. Nathanaël Betti & Gerrit Sarens & Ingrid Poncin, 2021. "Effects of digitalisation of organisations on internal audit activities and practices," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 36(6), pages 872-888, August.
    2. Nora Azima Noordin & Khaled Hussainey & Ahmad Faisal Hayek, 2022. "The Use of Artificial Intelligence and Audit Quality: An Analysis from the Perspectives of External Auditors in the UAE," JRFM, MDPI, vol. 15(8), pages 1-14, July.
    3. Ivy Munoko & Helen L. Brown-Liburd & Miklos Vasarhelyi, 2020. "The Ethical Implications of Using Artificial Intelligence in Auditing," Journal of Business Ethics, Springer, vol. 167(2), pages 209-234, November.
    4. Anastassia Fedyk & James Hodson & Natalya Khimich & Tatiana Fedyk, 2022. "Is artificial intelligence improving the audit process?," Review of Accounting Studies, Springer, vol. 27(3), pages 938-985, September.
    5. Twaha Kigongo Kaawaase & Catherine Nairuba & Brendah Akankunda & Juma Bananuka, 2021. "Corporate governance, internal audit quality and financial reporting quality of financial institutions," Asian Journal of Accounting Research, Emerald Group Publishing Limited, vol. 6(3), pages 348-366, March.
    6. Fekadu Agmas Wassie & László Péter Lakatos, 2024. "Artificial intelligence and the future of the internal audit function," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
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