FARView: Does an AI ‘default’ help auditors to make better judgments?

Does an AI ‘default’ help auditors to make better judgments?

Artificial intelligence is rapidly becoming part of the auditor's toolbox.

An important question is whether, and in what way, the integration of AI into the audit workflow can influence the auditor’s professional judgment.

In this episode of the FARView podcast, we explore a FAR project that builds on earlier research that showed that even something relatively simple as prepopulating audit workpapers with prior-year information can influence auditors' decisions.

This new study by Tracie Majors, Sebastian Stirnkorb and Isaac Yamoah asks whether similar effects occur when AI-generated risk assessments are embedded directly into the audit workpapers.

Does such an AI "default" help auditors make better judgments, or does it increase the tendency to rely on AI without sufficient critical evaluation?

Take-aways:

1. Review hidden defaults in audit support systems and workflows. Identify where auditors passively accept pre-selected options.

2. Encourage deliberate decision-making. Requiring auditors to actively make choices rather than accept defaults can improve critical evaluation, but may reduce efficiency.

3. Carefully consider how AI is integrated. Firms must decide whether AI recommendations should serve as a default starting point in workpapers or as a separate decision-support tool.

4. Balance AI reliance and professional skepticism. AI defaults may reduce unnecessary resistance to correct recommendations, but could also increase overreliance on incorrect outputs.

5. Recognize individual differences. Auditors' attitudes toward AI may influence how they respond to AI-generated recommendations and defaults.