15 May 2020
Professor Crawford Spence awarded Leverhulme Fellowship
Audit in the Age of Machines: creating room for more human judgement?
Crawford Spence, Professor of Accounting and Co-Director of the Business School’s FinWork Futures Research Centre has been awarded a Fellowship by the Leverhulme Trust to support the completion of his study of how audit and the profession of audit will be influenced by the rise of artificial intelligence and machine learning.
Working in collaboration with FinWork Futures colleagues Dr Dorothy Toh and Dr Rita Samiolo, Professor Spence will explore whether auditors will succeed in reshaping their role by using technology as a tool to perform their role to a higher standard, rather than just competing with or being replaced by it.
Professor Spence explains: “in common with other professions, audit’s status has traditionally been based partly on the exercise of professional judgement. They do more than just plug a series of variables into a spread sheet and see what answer it spits out; they test the information they are given based on their understanding of the business, and often on face-to-face interactions.”
“Latterly though, regulatory scrutiny of audit in the wake of the financial crisis and high profile corporate failures may have encouraged a drift to an even more rules-bound box-ticking approach; in other words the sort of audit that could, in theory, be performed by a machine rather than a human.”
“l’ll be exploring whether this will now mean that auditors are simply replaced by machines, or whether and how the profession can harness machine learning to help them to do more; potentially interrogating data in new ways or to freeing them up to conduct more in-depth evaluation and scrutiny. If they are able to achieve this, it is good news both for the profession, and for the quality and reliability of audit work that investors and the public rely on.”
Along with Professor Alex Preda and Dr Rita Samiolo, Professor Spence co-directs the FinWork Futures Research Centre, which explores how technological innovation is disrupting financial professions and financial expertise. He sits on the editorial boards of Accounting, Organizations and Society, The Accounting, Auditing and Accountability Journal and Contemporary Accounting Research.