How AI Can Aid In Fraud Detection & Financial Compliance
CPA Canada positioned Artificial Intelligence (AI) as an opportunity for accountants. “AI is opening new doors for CPAs in every sector. Why not make the most of it and learn how to use new technologies to your advantage?”
Traditionally, accountants have been quick to adopt technologies that help to save time and reduce costs. As a result, a TechTarget blog suggests that it is no surprise accountants are utilizing AI to:
- Analyze and automate document handling processes
- Monitor for potential fraud
- Manage regulatory compliance
Let’s explore each of these benefits in more detail…
- Analyze and automate document handling processes
From invoices and expense reports to purchase orders, accounting processes are document-heavy. Manually processing these documents is mundane, inefficient, and fallible. AI-based systems address these challenges by automatically processing documents and quickly detecting issues with financial information. Looking for a relatable example?
An invoice management system that is powered by AI can handle much of the invoice processing and can identify incorrect or incomplete data. The built-in intelligence notes relevant information in invoices such as the date, payment terms and amount due, and applies the appropriate internal codes to flag the documents for investigation.
- Monitor for potential fraud
As technology continues to develop at such a rapid rate, it is becoming increasingly difficult for accountants to become aware of and stop fraud. Accountants are unable to single-handedly sort through unprecedented amounts of data. A report by the Association of Certified Fraud Examiners outlines this impact and states that on average, a company loses 5% of its revenue to fraud each year, with the median loss at $140,000 per year.
To aid in solving the aforementioned problem, AI is able to quickly analyze large volumes of data, spot trends, and detect outliers for (potential) fraudulent activity. These records can then be flagged and forwarded to the appropriate level of management for further review.
- Manage regulatory compliance
AI can help accountants remain in concurrence with industry regulations - such as IFRS, ASPE, and GAAP - as well as with internal policies. AI can automatically read and complete documents, file paperwork, and monitor compliance. This allows accurate and timely processing, with a clear audit trail.
Overall, it is evident that AI creates many opportunities for accountants. However, it is important to highlight a clarifying statement from the CPA Canada article mentioned earlier:
The top AI technologies influencing business and accounting today are not replacing human abilities; they are creating a complementary set of value-added resources you can leverage to more effectively understand patterns...[and] information.
To learn about how we employ AI in our products, watch our latest webinar.
