Naz Randeria Warns SMSF Auditors: AI Boosts Efficiency but Cannot Replace Professional Judgment
"SMSF auditors must not confuse efficiency with evidence."
The Promise of AI in Auditing
Randeria, director of Reliance Auditing Services, noted that as AI tools become more accessible and sophisticated, they become increasingly attractive to practitioners seeking efficiency. AI can improve efficiency, identify patterns, and assist with preliminary analysis in audit practices.
The Critical Caveat
However, she cautioned against treating AI-generated output as inherently reliable simply because of its speed and polish. Auditors must independently verify AI outputs, including understanding the data, assumptions, methodology, and ability to test results against other evidence.
The Danger of Convenience
Convenience may lead practitioners to overlook caution, especially when AI-generated reports appear comprehensive but are built on weak inputs. Randeria emphasized that AI should only aid professional judgment, not substitute it.
False Comfort and Validation Risks
Using one AI tool to validate another may provide false comfort. This practice does not substitute for genuine professional verification.
Insurance and Liability Exposure
Randeria highlighted insurance exposure as an additional risk. Reliance on AI may raise professional indemnity issues, while data breaches could involve cyber insurance.
The Final Word
She urged practitioners to use AI thoughtfully, protect client data, verify outputs, and remember that responsibility remains with the auditor.