Sufficient and Appropriate

A regulator has set the expectation, the standards are being rewritten around it, and the practical problem has moved from permission to proof. The position in audit is further advanced than in any adjacent profession, and that is an advantage for firms that use it. The obligations are legible, the inspection regime is established, and the direction of the international standards is visible in draft. What remains is the work of showing that a given tool, used for a given purpose, produced something a firm was entitled to rely on. Artificial intelligence changes what an audit team can examine and leaves untouched the question of what constitutes sufficient appropriate evidence. The firms that will do well are the ones that treat a generated output as information that still needs evaluating, that certify tools before use and monitor them afterwards, and that can show an inspector the basis on which a tool was trusted. The Financial Reporting Council has already said that the human auditor is always accountable.5 The work now is making that statement operational.