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The Audit Podcast
Ep 284: Inside Audit, AI, and What Actually Works w/ Andrew Struthers-Kennedy
00:22:14
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- [00:00]
Andrew Strothers Kennedy
And then the biggest skill gap in internal audit is still AI, but the
- [00:07]
Trent Russell
future skill gap is going to be critical thinking. Most of us are tired. Most of us have too much going on. Most of us, you know, have attention spans that are shot to pieces, not least because of our delightful little precious toys. But remember, your readers are in the same position, so do not trespass over long on their energy levels and their goodwill. If you've ever been to a conference and at some point you're like, I didn't really get anything out of that, or I don't have anything practical, tactical to take back and do. That's why we started the Audit analytics and AI conference, because I can empathize. I did the same thing. That's cool. Show me how to do it. And so as part of the analytics and AI conference, especially the spring conference that we have on May 20 this year from 9 to 4 Central, it's 9 to 4 Chicago time. We have six presenters, you can get seven CPEs. And it's some of the best presenters that we've had over the five years that we've been doing this conference. So these are the ones that I've seen personally, three of which for sure, I have gone back and watched their recordings, you know, months later to go, I know they did this thing that was really cool. Let me go back and watch it so I can do it too. So there's no way that you won't have something you can actually do relative to analytics and or AI. So some of the fine folks we have coming back, Brittany McKinley, Brian McNally and Val Zappia from Elevations Credit Union, Macy's and Victoria's Secret, respectively. All three of those. I've gone back and watched their sessions from the prior years to see what they did so I could replicate it on my end. And then we have Paul Kerstein and Madeline Novelli from Vulcan Materials, and they're going to show you how to use AI to build a, like a central hub of audit intelligence paired with a library of reusable AI prompts. So you can. So any auditor on the team can use analytics. We also have multiple people from the Williams Energy Audit team. So they have a framework of using AI to do analytics, but then each one prefers different tools. So one person's like, I like Python. So they do theirs in Python. 1 likes R, they do it in R. 1 likes Power BI, they do it in Power BI. They also use data bricks. And so there's some functionality they do in databricks for SQL or even Python. In there if they wanted to. So it's one framework that gets applied and everyone kind of interprets it and uses it differently. It's fantastic. And then the last of our speaker slots, so we have five, the last one. We are having to keep a secret for now and hope to be able to tell you as soon as possible what that's going to be. But I think we can at least say it's going to be very innovative. All right, like I said, it is May 20, 9 o' clock till 4 o' clock central. You can search Audit Analytics Conference. It should be towards the top. If not the top. You can go to the auditanalytics conference.com links are in the show notes. You can go to my page on LinkedIn. Trent Russell find me. There's links to there if you follow me. It's pretty hard to miss some of the posts that we're going to be putting up for the Commerce this year. So this is probably the most exciting I've been about this conference since the very first one that we did. All right, hope to see you guys there. Thank you. Hello everybody. Welcome to another episode of the Audit podcast. I'm your host, Trent Russell, and today I am also the guest. Our actual host is Andrew Strothers Kennedy. He was on the show a couple of weeks ago also, but he's the global lead for CAE Solutions at Protiviti and he's been doing a series on LinkedIn of short kind of bits, like a minute, two minutes, something like that, videos with folks like myself talking audit, risk, AI technology, all that kind of good stuff. And so I think by now that he's published all those. And so we just want to take the full conversation and turn it into a podcast episode and release it to everybody out there. Some of the things that Andrew and I talk about though are where in the audit process or like where within your methodology, however you execute your audits, where we're seeing AI implemented by the team at a pretty high level. So there's some areas where there's going to be vendors that are best suited for a given aspect of the audit and there's going to be some other areas where there's kind of this new, I would say, low hanging fruit that a lot of teams could start to implement themselves. We also talk about, we've been doing this podcast now for six years. A lot of lessons learned from the guests that we've talked to, thought leaders, Caesar, audit committee chairs, all the like. And so Andrew asked me, like, what's the maybe Biggest lesson learned from talking to all those people. And then we also talk about, obviously AI upskilling is huge right now. It's a requirement in my opinion. I don't think that's like a super novel opinion there. But then along with that, there's another skill that I think is getting quickly depleted and it's one that's going to be critical for internal auditors to maintain their, their value within the internal audit role in the age of AI. So hopefully there's a couple of good nuggets in there for everybody. With that said, here we go.
- [05:27]
Andrew Strothers Kennedy
All right, welcome everyone. I'm here with Trent Russell, host of the Audit podcast and the driving force behind the audit analytics and AI conference. Trent, you talk to maybe more internal audit leaders on your podcast than anyone else I know. So I wanted to pull out your some of your sharpest predictions, most useful advice from everything that you're hearing on your podcast. What are maybe two or three predictions for internal audit in 2026? And then, you know, maybe as we look beyond that, a couple of three
- [05:57]
Trent Russell
years out, I think 2025 was not quite the year of the agent that everyone said it was going to be, but we definitely saw where, and in talking to clients also, but then talking to podcast guests where people were either using agents to actually test controls to think field work as opposed to planning and reporting, but they did it either based on 2024 results or they did it kind of in conjunction with 2025. So results. So it wasn't just a pure, we're going to run it through the tool, we're going to review it and we're going to be okay with it. And so that started to take off in 2025. I think 2026 there's going to be actual like, hey, we're going to take our pvc, we're going to put it into the tool, we're going to, we're going to let it spit it out. We have faith and trust in the tools now. And then we're going to have an auditor, auditors review the results. So I think that is very real for 2026 for certain teams who have kind of picked up the AI mantle. And then if we look out three years from, like if that happens this year, which I fully expect 2026, I don't think it would be too much of a stretch to say most compliance related testing is going to be automated. And I mean that across the internal audit profession, not just within like a given internal audit group. I think also for 2026, it's pretty realistic that a lot of planning can be automated with the use of AI. Also, we're starting to see a lot of that. So within the next three years you could see planning automated to a degree, socks to a degree, and reporting to a degree. Also, risk assessment's a little tougher, I think, for a lot of folks. So I'm not quite ready to say that one's going to be there yet. But I think by what we're in 2026, so 2029, 2030, those are very real possibilities. Yeah.
- [07:44]
Andrew Strothers Kennedy
And I mean if you just think where we've come from in the last, how far things have moved in the last three or four years, and that curve is definitely steepening almost every week. It's not beyond what I think is realistic and possible for everything you're describing to happen over that time horizon. If not, if not, faster. So, Trent, both you and I were at the IAA's great audit mind Conference in March. And one of my reflections on the conference was it felt more like a tech conference than any GAM that I'd been to before. Just a ton of of the established tech vendors that are progressing their platforms and integrating AI and many kind of new names and new entrants showing up, paying attention to the internal audit profession, which is just awesome to see. What were some of your kind of just key takeaways from gam specifically related to that tech conference feel and vibe that the conference had?
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Trent Russell
I don't think it's a huge surprise to say it's basically AI or bust, which is another way of saying it's not the auditors who, you know, you have to know how to use AI. It's not the auditors. Jobs aren't going to be taken by AI. It's going to be taken by the auditors who know AI. So I think it's another way of saying that, but like the trend is, it's still trending that way and similar to basically the Internet, like you can try to put it into a box and put it under your bed and go, eh, I'm not going to deal with that. It's not going away.
- [09:22]
Andrew Strothers Kennedy
Yeah, it's not going away. I think you and I were talking about it would be very interesting to just see and having seen the evolution of the exhibit hall as just maybe a bit of a proxy for the progression of the profession, I think it'll be equally interesting to see how the exhibit hall at GAM and other large conferences evolve over the next couple of years. I think we're going to see some very interesting kind of shifts, new entrance combinations, an increasing level of interconnectedness between many of the exhibitors as AI really infuses into everything that we do, and all of the ripple effects of that kind of play out.
- [10:02]
Trent Russell
I think the new tech entrance that you were talking about at GAM is super interesting. And I gave this advice. I only had seven minutes to talk, which was during my session, which was very tough for me. I didn't realize how tough that would be, but I told them there's a ton of vendors out there. I think it might have been the most they've ever had or very close to it. Go talk to all of them. I know it can be a pain for some people to do that, especially if you're an introvert, but go see what everyone else is building so that you can understand what the future is. Someone gave me that advice years and years and years ago. They're like, just suck it up. Go talk to all the vendors, see what they're offering. So you know what's possible Now I do it just because. For exactly that reason, like, I want to know what is possible, what's next, what's like the bleeding edge. And so there were a lot of new entrants this year. It seemed like, yeah.
- [10:53]
Andrew Strothers Kennedy
I think the awesome thing now about what we saw this year and maybe have had a preview of in prior years is they're all in that exhibit hall, like previously. Maybe to get access to the latest and greatest tech, you'd have to go and see them somewhere else. They're all there, attentive to and focused on the profession and the broader sort of assurance landscape. And it's just super exciting. So, Trent, you've again, you've interviewed hundreds of audit leaders. I don't know what episode you're up to now, well into the 2002, right on your podcast. What's, you know, maybe what distilling some of that best or most memorable piece of advice you've heard that maybe have actually changed the way that you've thought about or you've seen others lead an audit function.
- [11:38]
Trent Russell
I asked this guest, probably it was in the first year, and we're on year six now. And so it was one of the first ones that we did. And this person is a internal audit consultant. That's what she does. She runs her business, she consults internal audit, helps do outsourcing, all that kind of stuff. And I asked her, I said, what's more important, knowing the business or knowing audit? And she didn't even blink. She said know the business. And I thought she would at least go mention something about audit considering that's her job and that's how she gets paid and they're, you know, obviously her profession. And she didn't. And she. And that just the way she just immediately said know the business kind of took me back because there was no mention of audit. And I've heard that from a lot of I would say what I consider to be really good caes. And so there's a significantly more focus on maybe another way of saying this is focus more on if you're a CAE or aspiring on the EE part of CAE, maybe less so on the A part of CAE. And that's actually something Hal Garon, for those that know him, told me years and years and years ago. So another guest that we've had on multiple times and that always stuck with me also. So the E and knowing the business significantly more important than knowing the A and being the auditor the entire time.
- [12:56]
Andrew Strothers Kennedy
Yeah, I love that. I'm not sure I've ever heard it described that way before. So that's a big takeaway from me. I mean, there's so much discussion right now in the profession, and rightly so, about strategic alignment. And I think the IA's global internal audit standards get some credit for that. With the introduction of the requirement to have a formally established internal audit strategic plan. That's been a huge benefit for many audit functions. But that strategic alignment, I think that strongly implies really strong business acumen, understanding of the of the business priorities, critical initiatives and broader strategy. So I love the way and you hear a lot as people talk about the evolution of talent and the introduction of maybe different backgrounds into audit teams like engineering backgrounds, just by way of one example that it can be easier to teach an engineer how to be an effective enough auditor than it can be to teach in order to have the engineering mindset at an effective enough level. So I think credit to Hal. Thanks to you for relaying that. That's just really insightful and a clear and crisp way of thinking about it.
- [14:15]
Trent Russell
I just talked to a CAE for the podcast on the pre interview and he was talking about his talent strategy and said exactly that. He said, I have a data science team, they don't do data science, they do data science related audits. He said their data science background, we taught them audit and he does the same thing across the rest of his functions. And I thought that was a really good approach to take. And I think it's echoing what you were saying.
- [14:41]
Andrew Strothers Kennedy
All right, Trent, I'll do a kind of a couple of rapid fire questions for you, like one to three word quick responses to some questions and we'll see kind of where your head's at with respect to some of these. So the fill in the blanks, like the future of audit is.
- [14:56]
Trent Russell
I think it's the future of audit has to be actual value add.
- [15:01]
Andrew Strothers Kennedy
All right, Value generative AI in audit
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Trent Russell
is mostly real and underused.
- [15:10]
Andrew Strothers Kennedy
And then the biggest skill gap in internal audit is still AI, but the
- [15:17]
Trent Russell
future skill gap is going to be critical thinking.
- [15:21]
Andrew Strothers Kennedy
All right, well, I love that you went there, Trent, because I was going to ask you to pull the thread a bit on that and talk about the wrapper skills. If AI becomes kind of a core or given or table stakes capabilities to make effective use of to drive whatever outcome we're trying to efficiency, effectiveness, coverage breadth, depth, those types of things. The wrapper I think is, among other things, the power skills, the soft skills, the humanistic qualities that AI is going to find very, very hard to replicate. I think critical thinking is one you called out. How else are you thinking about that? And maybe what have you heard from some of your guests on this topic?
- [16:05]
Trent Russell
Well, one thing we've been asking our clients is where do you feel like you do not want AI so that you can retain the critical thinking? So for example, there was this, this team and the reviewer of the work papers used AI to give the review notes back to the staff. And there's, you know, 50 comments. How much of those are actual value add? And so if nothing else, like, yeah, sure, of course use it, but then go back through and use judgment, audit judgment, critical thinking skills and go, okay, that doesn't actually matter. Yeah, I get why. Maybe we should document that. But that's not really like look at the objective of the audit as it ties to the strategy. Why are we actually doing this? Okay, all the comment notes that AI gave us, let's get away, you know, do away with 48 of the 50 because these are the two that actually matter. So I think it's things like that that we really have to think through. I started to, I stopped using my GPS recently as much just because of that. Like I have this critical thinking fear in myself that I'm going to put too much reliance on it and I go, okay, I should be able to navigate to my kids school without having to use a GPS every day, you know, right?
- [17:16]
Andrew Strothers Kennedy
Getting the map out, turning upside down, making sure you kind of know where you're going. But map reading skills is like one example, right, of something that is. It probably is a demonstration of a traditional skill set that risks being kind of lost. And there are lots of analogues to that in the white collar and the professional space. So, Trent, you've got the conference, the spring conference coming up. Maybe tell us a bit about the conference where people can find more information about it and maybe what attendees will be able to do differently after attending the Audit analytics and AI conference than before they showed up for it.
- [17:54]
Trent Russell
My background has always been with analytics and tech. And so I would go to conferences, I'd go to webinars and somebody would show me something, a speaker would show me what they built. And I was always wanting to go, hey, that's great. I get why we need to do that. Can you show me how you built that though? Like, I want to go back and build what you built. And of course you typically don't get that, especially if you're in person conference. It just doesn't lend itself to that. So I think we're on year five now, coming into year six of doing the conference. It's always been virtual because of that. Like, I want people to be able to follow along with the presentations and be able to do with the session holders what they're doing. And so the whole goal, and we tell everybody that's going to present, people volunteer. I think we're full for the fall. So we do a two day one in the fall. We already have a full speaker list there. And I tell them like, you have to, basically when you come up with the title of your session, it has to start with how to do whatever it is and then go from there. So there's a lot of screen sharing. I recommend people not use decks that much, but it is so that you attend and you don't walk away going, oh, I know why we need to start using AI. I know why when you start using Analytics, I put my hands on the keyboard and I was able to follow along with this person. And now I know how to do it, especially if you have the recordings, which is an option especially for people that are overseas. One person put their hand up and said, hey, it's 2:00am but that was the best conference I've ever been to. And I went, okay, where we're going to record these going forward. So anyway, that's what, that's what they get out of it is it's the how to more so than the why. For those that are interested, you can search for the audit analytics and AI conference. It's on May 20th this year for the spring. It's one day, six hours this year. We are especially stoked because we have the Protiviti Audit Innovator Award winners. So we have an hour of the four winners from Protiviti, and they're each doing like 10ish minutes on basically the project that they submitted that got them recognized. So that's going to put a cap at the end of the day that we're all really looking forward to.
- [19:58]
Andrew Strothers Kennedy
Yeah, I think that ties really neatly. First of all, Trent, I mean, just congrats on establishing that platform. I think it's different to almost anything else that's out there in the sense that it's very practical, tactical, how to learnings and sharings from practitioners, all the trials and tribulations. Right. And I think what hopefully your conference attendees will hear from those recognized through this year's Productivity Order Innovator Award program is their lessons on the innovation trail. Right. From leading recognized innovators, like how they went through their journey from envisioning the innovation all the way through to kind of realizing benefits through outcomes and even what's coming next for them. So, uh, that's cool. I'm looking forward to tuning in. I'm glad you will put the kind of the link in this video for those that want to search it. And then, Trent, you put out a ton of great content through your podcast and through other information that you share. Obviously people can kind of look you up on LinkedIn anywhere else where people should, you know, follow your work or visit to keep on top of everything you're sharing.
- [21:10]
Trent Russell
LinkedIn's a really good source. You can also go to greenskiesanalytics.com so that's on the services side that we provide and the audit analytics conference.com to attend the conference.
- [21:20]
Andrew Strothers Kennedy
All right. Awesome. Trent, this is awesome. Love the discussion. Look forward to talking more. Hopefully visit you on your podcast soon and we'll definitely see you at the, at the conference in May. So thanks so much, Trent.
- [21:32]
Trent Russell
Appreciate it. Thanks for having me. Hey everyone, thank you very much for listening to this episode of the Audit podcast. Whatever platform you're listening on right now, I'm sure there's a subscribe button somewhere, so please hit the subscribe button there. If you're listening through itunes or Spotify, feel free to go give us that five star rating. It only took me about 16 seconds to give myself a five star review and it really helps to get future guests to come on the show. So we'd really appreciate that. Lastly, be sure to check out the show notes and follow us on all our social media channels, on Instagram, on LinkedIn and on TikTok. Also, if interested, please sign up for our weekly newsletter from the Audit Podcast. Thank you all. Have a great one.