The number of accounting scandals is amazing. Most result in re-stating the accounts and some in major scandals. The issue of regulatory oversight is frequently in the press. However, even with enforcement increasing and getting penalties higher, a new accounting issue is never far behind. It continues to get worse. Just look at the impact on British Telecom’s stock because of the irregularities found in accounting in their Italian division (read about it here).
At MindBridge Ai focuses on solving one of the massive issues underlying these scandals. We are building an expert system to help both internal and external auditors. This provides us with higher levels of assurance about the financial statements they are sworn to certify.
And the baseline issue we are dealing with is the amount of financial data they need to consume. There has always been too much of it.
Big Data
With Big Data, auditors are asked to “go fishing in a murky lake” and find accounting anomalies and irregularities for further review. Accountants and regulators agree to use statistical account sampling. Yet, the quality of the sample can only be measured after it has been sampled and analyzed. With the time pressure on providing audited results, if an irregularity or anomaly is found, the process has to start again. Moreover, this leads to costly re-statements which impact shareholder value and confidence in the audit firms.
Auditor Assurance
To solve this, Mindbridge Ai leverages machine learning AI to provide auditors with a more highly justifiable sample before the audit begins. Our Ai Auditor service ingests and analyzes the entire leger. We pinpoint areas they should be investigating early on with a higher degree of justification against the standard, and currently accepted sampling techniques. This gives auditors a higher assurance rate. It helps them improve upon the current approaches that only meet the standard, and not move past it. This moves towards the answers we, the press and firms like British Telecom need.