AI-ASSISTED AUDITING: NAVIGATING ETHICAL RISKS AND ENHANCING PROFESSIONAL STANDARDS

Abstract

This study investigates the ethical implications of integrating Artificial Intelligence (AI) in auditing, with a focus on adherence to the five ethical principles by IESBA. Using qualitative research, semi-structured interviews were conducted with auditors from two Big Four firms to explore current and potential challenges and adaptation strategies. Findings reveal AI is primarily utilized for administrative tasks but is anticipated to transform auditing roles, requiring enhanced skills and ethical guidelines. Ethical concerns include biases, the "black- box" nature of AI, and overreliance on technology. Audit firms are addressing these issues by implementing training programs and emphasizing human oversight. Rest’s Four-Component Model provides a framework for analyzing these challenges. The study offers insights for auditors, audit firms, and policymakers to ensure ethical AI integration, balancing innovation with professional integrity.