Throughout my investing and business life, I’ve been amazed by the number of accounting scandals and re-statements that have occurred. The issue of regulatory oversight is raised in the press, but even with increased enforcement and higher penalties, a new accounting issue is never far behind, and it’s continued to get worse. Just look at the impact on British Telecom’s stock because of the irregularities found in accounting in their Italian division (read about it here).
One week into joining MindBridge Ai, I can see how we are focused on the goal of solving one of the massive issues underlying these scandals, and I can see how we are building an expert system to help both internal and external auditors provide us with higher levels of assurance about the financial statements they are sworn to certify.
And the baseline issue we are dealing with is the amount of financial data they need to consume. There has always been too much of it. The Big Data problem facing auditors is that they are asked to “go fishing in a murky lake” and find accounting anomalies and irregularities for further review. To this point, accountants and regulators are agreed that this should be done using statistical account sampling. However, the quality of the sample can only be measured after it has been sampled and analyzed. And with the time pressure on providing audited results, if an irregularity or anomaly is found, the process has to start again. And this leads to costly re-statements which impact shareholder value and confidence in the audit firms.
To solve this, Mindbridge Ai is leveraging machine learning AI to provide auditors with a more highly justifiable sample before the audit begins. Our Auditor AI service can ingest and analyze the entire leger and pinpoint areas they should be investigating early on with a higher degree of justification against the standard, and currently accepted sampling techniques. This gives auditors a higher assurance rate and helps them improve upon the current approaches that only meet the standard, and not move past it and towards the answers we, the press and firms like British Telecom need.[/vc_text_element][/vc_column][/vc_row]