# SUMMARY Sebastian Burgermeister discusses AI's impact on auditing, exploring integration, risks, and the human element in internal audit functions. # IDEAS: - AI automates routine tasks, analyzes data more efficiently than humans, and identifies patterns indicating risk. - Internal audits remain essential, focusing on independence, competence, and adherence to professional standards. - AI tools enhance audit processes by streamlining work, analyzing big data, and creating audit reports. - Cybersecurity audits require AI to address new threats while ensuring information security and compliance. - AI could be weaponized by cybercriminals, presenting new security challenges internal auditors must understand. - Predictive insights from AI can transform internal audits into strategic advisory roles within organizations. - Data privacy concerns arise when AI processes confidential company information requiring strict compliance measures. - AI integration requires trust and assessment of the security and privacy posture of AI service providers. - AI allows organizations to transition from mere control functions to deeper strategic insights in auditing. - Using AI tools involves understanding and managing the risks associated with leveraging such technologies. - AI improvements enhance efficiency, accuracy, and scope within internal audit practices, increasing organizational value. - AI facilitates real-time interaction and insights, streamlining data processing for better decision-making. - AI must respect data privacy, controlling what information is accessible based on organizational permissions. - Human expertise is irreplaceable in understanding organizational culture and nuances during audits. - AI's capabilities include generating audit recommendations, management summaries, and analyzing regulatory compliance gaps. - Effective AI solutions must account for cost, security, integration, and trust in data handling processes. - Machine learning complements traditional auditing practices through improved pattern recognition and anomaly detection. - Organizations should explore integrating AI technologies carefully to enhance overall audit effectiveness and compliance. - Integration of AI into audits increases the relevance and adaptability of internal audit functions to change. - A strategic approach to AI in auditing involves embracing technology while preserving necessary human involvement. - Organizations need to tailor AI tools to their specific business contexts to derive maximum benefits. # INSIGHTS: - Balancing AI integration with human expertise is crucial for effective internal auditing. - Emphasizing data privacy and security strengthens trust in AI-assisted audit processes and outcomes. - Effective audit strategies leverage AI capabilities to enhance organizational performance and risk management. - Continuous learning is necessary for auditors to adequately understand evolving AI implications on audits. - AI can facilitate a transition in internal audit functions from oversight to strategic management advisory roles. - AI's role in audits must prioritize maintaining confidentiality and adhering to data protection regulations. - Successful AI integration depends on establishing clear operational protocols within organizations for internal audits. - The potential of AI in internal audits lies in framing it as a strategic asset rather than just a tool. - Embracing AI requires ongoing collaboration between human auditors and technology for optimal results. - Developing a robust framework for AI use enhances internal audit capabilities while safeguarding data privacy. # QUOTES: - "We are on the cusp of a transformative era with AI integration into internal audit functions." - "AI could streamline the internal audit work, analyze Big Data, and write audit reports." - "As AI technology advances, integration into internal audit functions becomes essential." - "AI must respect data privacy, controlling what information is accessible based on organizational permissions." - "Internal audit should understand the business needs and leverage AI tools for better advisory services." - "AI could be used by cybercriminals, presenting new security challenges internal auditors must understand." - "The role of internal audit has become complex and important in a dynamic landscape." - "Predictive insights from AI can transform internal audits into strategic advisory roles." - "AI tools must streamline our work while providing additional insights from a business perspective." - "Trust and assessment of security and privacy posture are vital with AI service providers." - "AI enhances operations, allowing auditors to engage actively in strategic planning discussions." - "We use AI tools to create audit programs, recommendations, and management summaries." - "Compliance requires strict adherence to data privacy when allowing AI access to sensitive information." - "Our integration plans must ensure that AI solutions are secure and cost-effective." - "Our demo will show how AI improves real-time interaction during the audit process." - "Auditors need to understand new threats and evaluate the risks connected to utilizing AI." # HABITS: - Consistently assess AI service providers' security and privacy measures during integration processes. - Maintain open communication and collaboration with teams leveraging AI in audit practices regularly. - Evaluate audit processes to identify areas for increasing efficiency through AI technologies. - Create audit reports and recommendations by using AI tools to save time and enhance accuracy. - Regularly update training on AI technologies to keep audit practices current and relevant. - Engage in continuous learning regarding cybersecurity threats related to AI in audit functions. - Foster a culture of adaptability within audit teams to embrace new AI technologies effectively. - Use AI to streamline data analysis within audits, optimizing time and resource management. - Leverage AI capabilities for gap analysis based on regulatory compliance frameworks. - Establish strict guidelines for data access when implementing AI solutions in auditing. # FACTS: - The role of internal audit is becoming increasingly complex with technological advancements like AI. - AI has the potential to revolutionize auditing by providing deeper insights into business processes. - Data privacy regulations dictate strict compliance with confidential information when using AI. - AI is capable of identifying risk patterns that might otherwise go unnoticed in traditional audits. - Cybercriminals can exploit AI tools, necessitating auditor vigilance and greater understanding of risks. - Artificial intelligence streamlines routine tasks, freeing internal auditors for more strategic responsibilities. - Integration of AI requires a careful balance of automation and human oversight in audit functions. - Effective deployment of AI in internal audits hinges on organizations' technical and business readiness. - AI's role in audits is not just supportive; it can enhance decision-making and strategic insight. - Leveraging AI in audits can increase operational efficiencies while improving risk management strategies. # REFERENCES: - Microsoft Teams for internal audit communication and integration. - Adaptive GSC platform for secure audit process architecture. - Chat GPT version four as an AI assistant for audit functions. - Various AI tools for developing audit plans and recommendations. - Frameworks for assessing AI service provider security and privacy postures. # ONE-SENTENCE TAKEAWAY Integrating AI into internal auditing enhances efficiency, insights, and strategic advisory, requiring careful implementation and human expertise. # RECOMMENDATIONS: - Assess the data privacy implications before implementing AI solutions within audit processes. - Develop a clear integration strategy for utilizing AI tools in internal auditing functions. - Regularly update training for internal auditors on AI technology and cybersecurity practices. - Foster collaboration between internal audit teams and IT departments when deploying AI systems. - Implement clear guidelines for data access and security during AI tool usage in audits. - Explore opportunities for AI to automate routine tasks, enhancing overall audit effectiveness. - Maintain human oversight while utilizing AI tools to ensure contextual relevance in audits. - Integrate AI solutions gradually by starting with pilot projects to assess effectiveness. - Balance the use of AI with maintaining independence and objectivity within audits. - Encourage auditors to use AI for generating recommendations, summaries, and data analyses.

Here’s a Mermaid mind map diagram summarizing the key ideas and concepts discussed in the webinar on the impact of artificial intelligence (AI) on the work of auditors: ```mermaid mindmap root((Impact of AI on Auditors)) A(Artificial Intelligence Integration) A1(Automation of Routine Tasks) A1a(Analyze Large Data Sets) A1b(Identify Risk Patterns) A2(Revision of Audit Strategy) A2a(Human Element Consideration) A2b(Independent & Competent Audit) B(Cyber Security) B1(AI as a Monitoring Tool) B1a(Detect & Respond to Threats) B2(New Threats from AI) B2a(Deep Fakes) B2b(Cyber Criminal Use) B3(Evolving Cyber Threat Landscape) C(Data Privacy) C1(Handling Sensitive Information) C2(Compliance with Data Privacy Laws) C3(Evaluating AI Service Providers) C3a(Information Security Assessment) C3b(Risk Assessment) D(Integration of AI Tools) D1(Enhanced Decision Making) D1a(Predictive Insights) D2(Audit Processes Improvement) D2a(Streamlining Workflows) D2b(Audit Reporting Assistance) E(Technical and Business Requirements) E1(Security Considerations) E2(Seamless Integration) E2a(Legacy System Compatibility) E3(Controlled Data Flow) F(Implementation Strategy) F1(Choosing User Interface) F2(Defining Source Systems) F3(Deployment of AI Models) F3a(OpenAI in Microsoft Azure) G(Challenges and Responsibilities) G1(AI Hallucinations) G2(Ensuring Final Audit Responsibility) ``` This diagram provides a structured overview of the main topics and subtopics discussed in the webinar, highlighting the multifaceted impact of AI on internal auditing functions, cybersecurity concerns, data privacy issues, integration strategies, and implementation requirements.

### Key Takeaways from the Webinar on AI in Internal Auditing 1. **Webinar Focus**: Exploration of AI's impact on auditing, including automation and efficiency improvements. 2. **AI's Role in Auditing**: - Automates routine tasks. - Analyzes large datasets. - Identifies patterns indicating risk or control weaknesses. - Can write audit reports and create audit tests. 3. **Maintaining Human Element**: While employing AI, it's critical to retain the understanding of organizational culture, ethics, and human behavior in audits. 4. **Cybersecurity Perspective**: - AI can assist in monitoring and responding to cyber threats. - However, AI can also be weaponized by cybercriminals (e.g., deep fakes). - Auditors must understand these new threats to mitigate risks. 5. **Data Privacy Concerns**: - AI needs access to sensitive data, creating a responsibility to safeguard this information. - Organizations must assess AI providers’ security and privacy protocols rigorously. 6. **Integration of AI in Audit Systems**: - AI can strengthen decision-making with predictive insights. - ChatGPT can assist in developing audit programs, questions, and reports. - Auditors remain accountable for the final results and handling of sensitive information. 7. **Technical Integration Requirements**: - Secure access to internal systems. - Real-time interaction capabilities. - Data flow must be controlled, with ownership and privacy considerations. - Low adaptation costs for implementation. 8. **Implementation Steps for AI in Auditing**: - Choose an interface for user interaction (e.g., Microsoft Teams). - Define source systems that provide contextual data. - Deploy the large language model optimally (public vs. private cloud). - Utilize API integrations for data retrieval. - Set up a semantic kernel for nuanced text analysis. 9. **Demonstration Insight**: - Displayed a live demo showing ChatGPT's capabilities within an internal audit solution. - Highlighted functionalities such as generating reports, analyzing delays in actions, and interacting in multiple languages. 10. **Call to Action**: Encouragement for auditors to explore and experiment with ChatGPT to enhance efficiency and insigh in their audit practices. ### Conclusion The integration of AI, particularly tools like ChatGPT, into internal audit processes could transform auditing practices, making them more efficient while maintaining accountability and adherence to data privacy standards. Auditors must adapt by understanding and implementing these technologies thoughtfully.