ChatGPT, from AI startup OpenAI, is an AI-powered chatbot whose level of sophistication has taken the business world by storm like no other chat platform before it. ChatGPT is based on the General Pretrained Transformer language model, which its developer says allows the platform to “generate human-like responses to text inputs in a conversational manner.” By using approximately 175 billion parameters, the technology is remarkably effective in generating everything from legal briefs, to Shakespeare-style poetry, to high-school essays instantly. The response to ChatGPT has been so strong that Microsoft has just announced a multiyear investment in OpenAI that could be worth as much $10 billion.
Internal auditing is among the many professions that are realizing how ChatGPT could shape their future. It’s an exciting conversation to have, but it comes with a degree of risk for early adopters.
The positive implications that ChatGPT has for internal audit are easy to see. In a recent ISACA blog post, AI evangelist Abdul Jaleel Puthenpurayil writes that ChatGPT, with only minor adjustments by the user, can handle large swaths of “repetitive and mundane tasks” and allow auditors to “focus more on areas where creativity and critical thinking are important.”
Such a mindset fits perfectly into an Agile audit methodology, which prioritizes a more continuous auditing mindset where organizations can count on consistent, up-to-date assurance. Through technologies such as ChatGPT, “assurance will increasingly become real time,” writes Tom McLeod, former chief audit and risk officer at RMIT University in Melbourne, Australia, in a recent LinkedIn post. “If a bot can produce an observation for action immediately upon observation, what is stopping it being sent to the responsible manager for instant action?”
Additionally, AI-based tools such as ChatGPT can offer valuable learning experiences for less experienced auditors. “Auditors can leverage AI solutions in enhancing audit skills and knowledge on emerging technologies such as autonomous vehicles, blockchain, and various connected devices,” Puthenpurayil writes. “AI can also assist the audit function in addressing skills gaps, to some extent, through the dissemination of knowledge on specific subjects.”
This application has particular value for auditors whose organizations operate in more conceptually sophisticated sectors such as financial services. “Understanding things such as liquidity risk management and capital was difficult when I was new to the profession,” says Julio Tirado, executive vice president–director of internal audit at Tulsa, Okla.-based SpiritBank. “A junior auditor new to the industry now can use tools like ChatGPT to help fill gaps, similar to a free version of your own CliffsNotes.”
For example, Tirado says ChatGPT can quickly search for detailed information such as the nature of cybersecurity or how blockchain affects the financial services risk landscape and present the information at the user’s knowledge level. “For comparing and contrasting information, it’s a wonderful supplemental tool,” he notes.
ChatGPT can offer an avenue for auditors to improve more basic skills as well, including client communication and — somewhat ironically — writing. “If you struggle with writing reports or even emails, ChatGPT can offer alternative ways of conveying information — ways you might not initially think of,” Tirado says. “If you are struggling to communicate with the board, you could ask the bot to, for example, convey a particular finding or point in a more ‘inspirational’ or ‘convincing’ way. Over time, as you see what works and what doesn’t, you’ll become a better writer and communicator.”
Risks and Limitations
Like any new technology, ChatGPT comes with limitations that increase risk for users. For example, as sophisticated as ChatGPT is as a language platform, it is not capable of discerning whether information is accurate, nor can it appropriately cite sources for the information that is presented. “ChatGPT is not a truth filter,” McLeod writes on LinkedIn, “so how will we know that what is presented is based in reality?”
This systematic shortcoming leaves an important place for reasoning that only a human being can contribute. This fact may be heartening for people who are concerned that ChatGPT and other AI systems could be used to replace entry-level work in a variety of professions ranging from journalism to data analysis. However, internal audit should be concerned about the risk that organizations may neglect due diligence of ChatGPT use for the sake of convenience.
Reasoning is not the only critical element that internal auditors bring to the table. Communicating information in a logical, convincing way is as important as accuracy. “It’s not just about analytics; it’s about selling and having the confidence to make a case,” Tirado says. “Being accurate is not the same thing as being convincing. You need to have both elements equally.”
A Supplemental Tool, for Now
Regardless of one’s view of the potential of ChatGPT and technologies like it, these tools are not going away. Knowing this, an internal auditor has two choices: They can ignore them, or they can embrace them.
“There’s a saying in the AI community: ‘AI will not replace people, people with AI will replace people,’” Tirado says. “Those who choose to adapt and learn how to leverage these tools are going to get farther faster than those who do not.” While ChatGPT may not always produce the desired results, he says, as a supplemental tool for learning, “it is too important not to embrace.”