Podcast Summary: IA on AI – Ep 1: Is AI Taking Over Audit Jobs?
Podcast Information:
- Title: The Audit Podcast
- Host/Author: Trent Russell
- Description: The Audit Podcast features insights from a diverse range of professionals, from interns to IT audit directors, CAEs, and audit committee members. The show delves into integrating technology into auditing, achieving quick wins, the latest SOX guidance, and various other topics relevant to the audit community.
- Episode: IA on AI – Ep 1: Is AI Taking Over Audit Jobs?
- Release Date: July 1, 2025
Introduction
In the inaugural episode of the "IA on AI" series, part of The Audit Podcast network, host Trent Russell engages in a compelling conversation with John Thompson, Senior Vice President and Principal at The Hackett Group. Thompson brings over 38 years of experience in AI, from building data warehouses and business intelligence environments to pioneering work in artificial intelligence since 1991. The episode explores the pressing question: Is AI taking over audit jobs?
AI-Induced Workforce Disruption in Auditing
The discussion kicks off with a pressing concern highlighted by Trent: the potential for AI to disrupt the auditing workforce significantly. Citing recent news from TechCrunch, Trent notes that big tech firms hired 25% more new graduates in 2024 compared to the prior year, attributing this surge to AI automation. Additionally, he references a statement from Anthropic’s CEO predicting that AI could eliminate up to 50% of white-collar jobs in the next five years, posing a dire threat to the economy.
Trent Russell [00:58]: “Big tech firms hired 25% newer graduates in '24 compared to the prior year. And there are things that are pointing to that that is because of AI automation.”
John Thompson responds by acknowledging the inevitability of disruption but challenges the apocalyptic predictions.
John Thompson [02:12]: “I don't think we're going to wipe out, you know, the early career offerings. Just not going to happen. It's going to be different, but it's not going to be apocalyptic.”
Thompson emphasizes that while AI will transform job roles, it won't necessarily eliminate positions wholesale. He provides the example of Microsoft laying off 7,000 employees while simultaneously planning to hire 10,000 more, attributing these changes to the need for AI literacy within the workforce.
Perspectives on AGI: Predictions and Realities
The conversation naturally transitions to the topic of Artificial General Intelligence (AGI) and its anticipated arrival. Trent shares his findings from various sources, noting that while CEOs of major tech companies predict AGI's imminent arrival (e.g., by 2030 or 2050), leading researchers like Yann LeCun and Rodney Brooks offer a more measured timeline, estimating AGI’s realization to be over a century away.
John Thompson [06:00]: “If you go listen to Yann LeCun... he says something around 20, 50 or something like that. Rodney Brooks... he's the only person out there saying it's longer than me. I say it's 123 years. He says it's 130 years.”
Thompson categorically dismisses the rapid AGI predictions, highlighting the complexities involved in achieving true general intelligence. He underscores that current AI advancements, while impressive, are still far from the multifaceted capabilities that AGI would entail.
AI's Role in Auditing: Current Capabilities and Future Prospects
Delving deeper into AI's application in auditing, Trent poses a hypothetical scenario: delegating the task of auditing IT general controls (ITGCs) for Sarbanes-Oxley (SOX) compliance to an AI. He questions whether AI can handle the diverse and complex IT environments typical of large corporations, which may involve numerous applications like SAP, Oracle, and various homegrown systems.
Trent Russell [12:02]: “If you and I got interested in it and said we were going to do it, we'd have that application done and dusted and tested within months.”
John Thompson elaborates on the practical implementation of AI in auditing, suggesting that while AI can handle bounded functions effectively, it would require tailored agents for different systems.
John Thompson [12:35]: “Each of these systems are unique and different in how they hold data and how you access data. So you're going to have to build up these agent farms, these agent workflows... it's going to have to be configurable, like a LEGO kit.”
Thompson underscores that AI's current strength lies in handling specific, well-defined tasks rather than generalizing across diverse platforms without significant customization.
AI Risk Governance in Audit Departments
The conversation shifts to the governance of AI risks within audit departments. Trent references a survey by KPMG, highlighting that while responsible use policies for AI are prevalent, formal AI risk governance frameworks are still lacking in many organizations. A primary challenge identified is the lack of expertise and appropriate structure within boards and audit committees to oversee AI-related risks effectively.
Trent Russell [15:48]: “We have to build an application that does that. Now, you know, we're moving into an era where we used to, you know, get the requirements, we build the application and the application ran two plus two was always four... But, you know, it's not magic.”
John Thompson echoes these sentiments, discussing the disconnect between technical experts and risk management professionals. He emphasizes the need for clearer communication and shared definitions to bridge the gap between different departments.
John Thompson [17:46]: “When I look at, you know, we've been working on AI for 70 years... we have all sorts of conversations and people come up to me or say to me while I'm up on stage, oh, you're an AI hater... I'm an AI optimist... we will get there.”
Optimism for AI's Positive Impact
Despite the concerns surrounding AI, both Trent and John maintain an optimistic outlook on the technology’s potential to augment rather than replace human auditors. Thompson stresses that AI will significantly automate routine tasks, freeing auditors to focus on more strategic and complex aspects of their roles.
John Thompson [10:58]: “Are auditors, are auditors going away? No, I'm not here to scare the audience. That's not the way it's going to be. They're going to be augmented.”
Trent further explores the necessity for audit departments to adapt by potentially partnering with third-party providers to leverage AI effectively, given that many internal audit teams may lack the technical expertise required to implement and manage advanced AI solutions internally.
Trent Russell [09:31]: “I think they're going to have to go to a third party to get it.”
Addressing the Upside of AI
In a thought-provoking segment, Trent asks John a question he often hears but rarely gets addressed: What is the real upside of AI in auditing? While the fear of job loss and economic disruption is prevalent, the potential for AI to enhance auditing practices, improve accuracy, and increase efficiency remains largely underexplored in public discourse.
John Thompson [18:18]: “No one ever goes to the other side and says, you know, what's the real upside here? You know, what is the really, you know, utopian, you know, view of what's going to happen with AI?”
Thompson advocates for a balanced perspective, recognizing both the challenges and the transformative benefits that AI can bring to the auditing profession. He envisions AI as a tool that can handle mundane tasks, allowing auditors to engage in more meaningful, analytical work that adds greater value to their organizations.
Conclusion
The first episode of "IA on AI" effectively navigates the complex terrain of AI's impact on the auditing profession. Through insightful dialogue, Trent Russell and John Thompson dissect the nuances of AI-induced workforce changes, the realistic timeline for AGI, the practical applications of AI in auditing, and the critical need for robust AI risk governance frameworks. While acknowledging the disruptions AI may bring, both hosts maintain a forward-looking optimism, emphasizing AI’s role in augmenting human capabilities and transforming auditing practices for the better.
Trent Russell [19:06]: “Be sure to follow the link to greenskiesanalytics.com in the show notes and schedule time to see how Green Skies can make the hype of AI a reality in your internal audit department.”
This episode serves as a foundational discussion for auditors and audit professionals grappling with the implications of AI in their field. It balances caution with optimism, urging the audience to embrace AI's potential while remaining vigilant about its governance and implementation.