KPMG Announces AI Integration into Global Smart Audit Platform, KPMG Clara

July 29, 2024 12:16 PM EDT | Source: KPMG LLP^[1]

KPMG's 90,000 auditors globally will be using KPMG Clara with AI

New AI capabilities live within KPMG Clara, interacting directly with audit engagement documentation and our audit methodology for both public and private companies

Capabilities across the full audit process will enhance quality and the audit experience

KPMG Clara with AI is supported by our Trusted AI framework that emphasizes a human-in-the-loop mindset to ensure quality and accuracy

New York, New York--(Newsfile Corp. - July 29, 2024) - Today, KPMG LLP, the U.S. audit, tax and advisory firm, announced the integration of generative AI into KPMG Clara, our global smart audit platform.

"With seamless access to trusted generative AI capabilities within our audit workflow, our 9,000 auditors will be empowered to deliver quality audits," said Scott Flynn, KPMG U.S. Vice Chair - Audit. "KPMG Clara with AI will not only free up resources to spend more time on the areas of highest risk, but will directly help our teams exercise professional skepticism to protect the capital markets."

83% percent of financial reporting leaders^[2] believe it is important for auditors to use AI in their analysis, prioritizing risk and anomaly identification, data analysis and quality management, and risk mitigation and real-time auditing.

KPMG Clara with AI is connected to our broader transformation efforts to enhance audit quality through our Trusted AI framework. For example, new generative AI capabilities will help teams:

• Refine risk assessments: AI assistants can review documents to help engagement teams identify risk factors. For instance, within KPMG Clara, engagement teams can leverage AI to help review meeting minutes and flag possible accounting and fraud risks.
• Develop substantive testing procedures: Our AI assistant has direct access to our audit methodology, enabling auditors to design appropriate substantive testing procedures to respond to risks quicker.
• Enhance audit documentation: By working with our AI assistant, team members can quickly summarize, question and consider improvements to engagement-specific audit documentation within KPMG Clara.

"These artificial intelligence capabilities enhance our overall transformation to deliver a better audit experience for our people and the companies we audit," said Flynn. "Our AI capabilities will further strengthen our engagement teams to more effectively engage Audit committees and management committees."

KPMG today also unveiled AI and generative AI capabilities that will be deployed in the workflow in the coming months. These include:

• A growing prompt library that will, over time, include AI-powered agents to assist Audit teams in driving audit quality;
• Automated quality scoring to generate AI assessments and deliver feedback to Audit teams on actions for quality improvement;
• Use of AI and machine-learning to automate the review of financial statements, augmenting engagement teams' assessment that all required disclosures have been made to the capital markets; and
• Assurance capabilities integrated into the workflow for teams delivering assurance over disclosures, such as emissions disclosures.

"Our Trusted AI framework underpins everything we do with AI in the audit," said Thomas Mackenzie, KPMG U.S. and Global Audit Chief Technology Officer. "All of our auditors are trained on how to effectively use AI with a human-in-the-loop mindset to maintain quality, accuracy and professional skepticism."

By infusing AI through KPMG Clara, KPMG's 90,000 global Audit professionals will be empowered to focus more closely on higher-risk areas of the audit, sector-specific risks and challenges - to the benefit of both stakeholders and capital markets.

The capabilities announced today build on recent milestones in our journey to deliver an AI-enabled and people-powered audit, including:

• In June 2024, KPMG announced^[3] the integration of the Databricks Data Intelligence Platform into KPMG Clara, enabling our Audit professionals to analyze billions of financial transactions across thousands of audits, driving deeper insights into audit-related risks and further enhancing audit quality.
• In May 2024, KPMG announced^[4] upgrades to KPMG Audit Chat, our proprietary generative AI tool built on Azure OpenAI service. These capabilities will eventually be built into KPMG Clara as part of our long-term vision to deliver an AI-enabled audit.
• In April 2024, KPMG began deploying Copilot for Microsoft 365 to Audit partners and professionals. Engagement teams are already leveraging Copilot, along with Audit Chat, to transform the walkthrough experience by generating process narratives and flowcharts based on meetings with clients.
• In 2023, KPMG penned^[5] a multi-year global audit alliance with MindBridge, embedding its AI and machine learning capabilities into KPMG Clara in the form of Transaction Scoring. With KPMG Clara Transaction Scoring, auditors can perform analyses over 100% of transactional populations, delivering audit evidence and identifying outliers over both general ledger and subledger populations.
• In 2023, KPMG also announced^[6] a multi-year, multi-billion-dollar investment in Microsoft's AI and cloud services. Through this expanded alliance relationship, KPMG firms will infuse data analytics underpinned by Microsoft Fabric and generative AI through the Azure OpenAI Service and Azure Cognitive Services into the audit process.

To learn more about KPMG and our Trusted AI capabilities, visit www.kpmg.com^[7] or kpmg.com/trusted-ai^[8].

About KPMG LLP

KPMG LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing audit, tax and advisory services. The KPMG global organization operates in 143 countries and territories and has more than 273,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

KPMG is widely recognized for being a great place to work and build a career. Our people share a sense of purpose in the work we do, and a strong commitment to community service, inclusion and diversity and eradicating childhood illiteracy. Learn more at www.kpmg.com/us^[9].

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/217931^[10]

SOURCE: KPMG LLP^[11]

References

1. ^{^} KPMG LLP (www.newsfilecorp.com)
2. ^{^} 83% percent of financial reporting leaders (api.newsfilecorp.com)
3. ^{^} KPMG announced (api.newsfilecorp.com)
4. ^{^} KPMG announced (api.newsfilecorp.com)
5. ^{^} KPMG penned (api.newsfilecorp.com)
6. ^{^} KPMG also announced (api.newsfilecorp.com)
7. ^{^} www.kpmg.com (api.newsfilecorp.com)
8. ^{^} kpmg.com/trusted-ai (api.newsfilecorp.com)
9. ^{^} www.kpmg.com/us (api.newsfilecorp.com)
10. ^{^} https://www.newsfilecorp.com/release/217931 (api.newsfilecorp.com)
11. ^{^} KPMG LLP (www.newsfilecorp.com)