Information Technology made unprecedented spectrum of growth for many industries and professions. Application of Information Technology (IT) propelled excessive use of data and for the betterment of informed decision. This give an opportunity to many professions to manifest their efficiency in delivering the output with lower cost. Auditing was one of those sectors which is affected by new technology which have a huge effect on auditing performance as audit companies are increasingly investing in new technology to make their jobs simpler and easier. This also minimize the risk and saves the time with huge volume of data and transactions. Such advances are ushering in “a transformational era in auditing,” said [1], a member of the Public Company Accounting Oversight Board (PCAOB), during a recent conference. Technology is powerful tools, but they are not alternative to auditor’s knowledge, experience of Professional skepticism and judgment. [1],

 New technology allows an auditor to work and analyze a large volume of financial data /transactions instead of testing only a sample, the auditor is able to test 100% of a company’s transactions. [1], Thus, development of new technologies like AI and ML makes auditor have a deeper insight into the operations of the company and there by understanding and assessing risk potential in each audit area. The auditor must be familiar with this new advanced technology and up to date with it so that they can increase audit efficiency.  The study aimed to understand whether application of AI and ML in auditing assist an enhanced Professional skepticism and Professional Judgement of internal auditors and to identify whether AI and ML assisted Professional Skepticism and Professional Judgement improves overall audit efficiency of internal audit.  The study also examined various factors that affect use of AI and ML in the field of Professional Skepticism and Judgement of internal auditors and to study the challenges in applying AI and ML in Professional skepticism and Professional Judgement of internal auditors

Statement of the Problem

The world keeps on changing and new technology taking a massive impact on our lives. Sometimes, it is used to replace humans as many jobs of many professions have disappeared due to their replacement by modern technology. In this study, researchers would like to explore whether the application of AI and ML can have a better Professional skepticism and Professional judgment of auditors. This study sheds light on how Artificial Intelligence and Machine Learning enhances a better Professional Skepticism and Judgment of internal auditors. The researchers are purposed to focus much on details about the topic in which it will help expand the perceptions of the young auditor and make their performance high quality, faster and easier.

Firstly, the auditor will able to analyze a large number of financial data, in other words, the auditor will test 100% of a company's transactions rather than trying only a sample basis or random basis. [3] It will be easy for the auditor to find out the error or manipulation, frauds, and misrepresentation of the account or misstatement of materiality. Furthermore, by introducing AI, can save time and money. Automating and optimizing tasks will help a company to increase its productivity and operational efficiencies and make quick business decisions based on advanced analysis technologies. [3] Lastly, this will also help the auditors increase efficiency and effectiveness. Sample size depends on the nature of the research may less number of sample will not enough to generalise about the population. The credibility of the data for the study depends up on the information supplied by the auditors. The responses from auditors may be less accurate or they may not  disclose the information fully due to confidentiality reasons. Collection of data was difficult and this challenging due to the prevailing COVID 19 situations. Unable to conduct a filed visit to meet the auditors face to face in order to get a good respond from them and well explanation. Unable to meet the auditors to obtain sufficient information. Through mail messages may they not respond and replay.

According to a report prepared by AICPA Canada, [4] it has been emphasized how technology is essential than ever to embrace automation and think about AI and how we perform audits today. In the coming years, the future is with this advanced technology and the world is investing more on AI. Automation and bringing the changes that computers brought to the assurance profession (e.g., transferring ticking and calculating from hard copy ledger paper to electronic working papers) [4] This studies result shows that automation will not replace the auditor; instead, they will change the audit and the auditor’s role. Auditor has to be adapted and friends with new technology as well. 

Seetha Raju found that [5]  AI and big data have a considerable effect on the auditing profession. They also found that the adoption of AI by auditing companies will not only improve quality but increase overall audit efficiency. Moreover, decision-making in auditing will help an auditor by using an AI to provide consulting that is more beneficial than traditional auditing.

Chandra [4]. indicate that with the help of enormous processing power and big data is enabled to influence the profession of auditing significantly. Although there are selective initiatives to spread AI technology for particular auditing duty in four big companies, their study found that this will not only improve the quality of audit and decision-making but also will help them to build their capabilities to provide consulting services which have value-added that is more profitable than traditional auditing. Their studies found that artificial intelligence has a significant influence on various stage process of auditing and the possible disappearance of some traditionally known auditing stages.

Kevin [6] conducted a study to know how robotic process automation can disrupt the traditional audit model. With its capability to automate rules-based tasks that are repetitive and manual, RPA is expected to repurpose the auditor's role by displacing perfunctory tasks and emphasizing higher-order thinking skills and ability that will finally lead to enhanced audit quality and efficiency as well speed.

According to Keskinen [7]. Technology is developing at a fast pace and this transformation in record-keeping has a direct impact on audit firms.  As record-keeping changes, it puts pressure on audit firms to implement systems that cater to change in their clients’ methods. These promote automated auditing where the use of tools such as data analytics and AI are of significance. and these can improve the quality of audit and save time as well the efficiency will increase

Anca The Professional judgment describes the key to a successful audit engagement. For auditors to correctly use their Professional judgment, auditors must understand the rules and standards related to accounting and audit. ISA 200 emphasizes the importance of exercising Professional judgment in the planning stage and the auditor's audit work. Judgment is trained by an auditor whose training, experience, and knowledge have helped auditors develop the skills needed to achieve reasonable judgments. The researchers assure the importance of Professional skepticism. They stressed the appropriate level of practice, but Professional skepticism remains a difficult term to identify and measure. Moreover, it is hard to decide if the primary cause of audit deficiencies is a lack of skepticism.

Researchers have been closely analyzed the outcomes of various research regarding whether modern technologies assist an auditors in their professional skepticism and judgement. The previous studies clearly show that the routine operation of auditing like vouching, checking account balance, some regular verification, etc. already automated. [4-8]  Researchers were not able to come across any studies relating to how application of AI and ML in auditing helps auditors for better professional judgement and skepticism. This study explore how AI and ML can assist an auditor in enhancing their professional skepticism and judgement in an internal auditing environment

The result of the analysis shows that the application of AI and ML in auditing enhanced and can contribute better Professional skepticism and Professional judgment for internal auditors in selected companies in Oman. Based on the response from the internal auditors, it is concluded that here is significant relationship between the application of AI and ML in auditing contribute enhanced professional skepticism and judgement of auditors. 

The result show a high positive correlation between the responses given by the internal auditors regarding the use of AI and ML in auditing and AI and ML assisted auditing on the overall audit efficiency of internal control. This can be concluded that application of AI and ML in auditing and AI and ML assisted Professional judgment and skepticism can improve overall audit efficiency of internal audit in Omani companies.

Based on the analysis, there is a significant relationship between Professional Skepticism and Professional Judgement in AI and ML assisted auditing and overall audit efficiency in AI and ML assisted auditing. Moreover, the regression coefficient as per the result shows that the extend of automation of auditing or application of AI and ML in auditing rise a higher percentage of overall audit efficiency in internal audit

The research result shows that the most significant factors that affect the application of artificial intelligence and machine learning are the area of Professional skepticism and judgment is the attitude of the management and employees and availability of accurate data. And the cost of implementation. These Various factors and applications of AI and ML in auditing assisted and helped the Professional skepticism and judgment. 

The factors such as that availability of accurate data , higher cost of implementation, The extend of digitalization of operation of the firm Attitude of the top management and employees affecting the applications of AI and ML in Professional skepticism and judgment. The attitude of top management and employees are the most important factor as per the respondent followed by availability of accurate data.

Based on the findings, there are many challenges when implementing AI and ML in auditing, and AI and ML assisted Professional skepticism and judgment. As per the result of the research, the data validation is the greatest and most important challenge in using and implementing AI and ML in auditing followed by ethical considerations of data that need to be used. Also the auditing needs to be aware and up to date with the technology and market what is going on. Hence, the internal auditor feels that the requirement of auditors' training in AI and ML filed this may lead to less interest amongst employee’s are will be the next challenges of implementing and use of AI and ML in Auditing. The reliability of Ai and Ml's data is difficult to judge and control. 

However, the challenges of applying the AI and ML in Professional judgment and skepticism according to the result that there is a significant association between the challenges such as data validation, reliability of data, ethical consideration and training requirement which has a direct impact on the application of artificial intelligence and machine learning 

High cost of implementation, lack of knowledge and skill is required for implementing the AI and ML in auditing as well as training for the improvement dealing with the new technology are some of the other challenges as per the response from auditors. Moreover, many internal auditors responded that automation audit movement in auditing according to their organization movement, many of them responded the movement is going slowly day by day. Some of the organizations have already used some of this new technology for their activities. Finally, as the research result shows that the application of AI and ML in auditing is an opportunity for auditors to migrate, many employees are aware of the movement of AI and ML in Auditing. Many internal auditors responded that this would be a great tool and opportunity for auditors' improvement and enhance the client works as well. This will also increase the level of accuracy and reduce errors and enhance audit quality.

The demographic characteristics of internal auditors in terms of Gender, Industry, Qualifications, and Years of experience are shown in this section. Gender of respondents do not effect with responses towards applications of Al and Ml to assist professional skepticism professional judgment. Age and gender have significant relationship on responses of auditors towards application of AI and ML in auditing. While, Qualification, Years of experience, and Industry of auditors have not shown any statistical relationships with responses towards applications of Al and Ml that assist professional skepticism and professional judgment.

The researchers have studied the extent to which AI and ML's application assists an auditor for better Professional skepticism and judgment. This study is based on the perception of internal auditors from selected companies in Oman. As per result, it shows that the application of AI and ML in auditing enhanced and can contribute better Professional skepticism and Professional judgment for internal auditors in selected companies in Oman. Based on the response from the internal auditors, it is concluded that here is significant relationship between the application of AI and ML in auditing that contribute enhanced professional skepticism and judgement of auditors.

Based on result of the research, it can be concluded that a high positive correlation between internal auditor responses regarding AI and ML in auditing that leads to an enhanced professional skepticism and judgement of internal auditors. AI and ML assist auditing improves overall audit efficiency in internal auditors. This means that AI and ML could assist an auditor to have a better professional judgment and skepticism for conducting the line work and the use of AI and ML in auditing contributes to better Professional skepticism and judgment in selected companies in Oman. Hence AI and ML assists an auditor in taking a better judgment which will be free from human errors when conducted manually by the auditors. 

The result shows a high positive correlation between the responses given by the internal auditors regarding the use of AI and ML in auditing and AI and ML assisted auditing on the overall audit efficiency of internal control. This can be concluded that application of AI and ML in auditing and AI and ML assisted Professional judgment and skepticism can improve overall audit efficiency of internal audit in Omani companies.

The research result shows that the most significant factors that affect the application of artificial intelligence and machine learning are the area of Professional skepticism and judgment is the attitude of the management and employees and availability of accurate data. And the cost of implementation. These Various factors and applications of AI and ML in auditing assisted and helped the Professional skepticism and judgment. The factors such as that availability of accurate data , higher cost of implementation, The extend of digitalization of operation of the firm Attitude of the top management and employees affecting the applications of AI and ML in Professional skepticism and judgment. The attitude of top management and employees are the most important factor as per the respondent followed by availability of accurate data.

Based on the findings, there are many challenges when implementing AI and ML in auditing, and AI and ML assisted Professional skepticism and judgment. As per the result of the research, the data validation is the greatest and most important challenge in using and implementing AI and ML in auditing followed by ethical considerations of data that need to be used. Also the auditing needs to be aware and up to date with the technology and market what is going on. Hence, the internal auditor feels that the requirement of auditors' training in AI and ML filed this may lead to less interest amongst employees are will be the next challenges of implementing and use of AI and ML in Auditing. The reliability of Ai and Ml's data is difficult to judge and control.

According to the result, it is suggested to give training to auditor’s in new technologies such as AI and ML will help them present the works productivity and efficiency. It is advisable to have good support from top management for implementing AI and ML in internal auditing of companies in Oman. The companies who are planning to implement AI and ML technologies must be careful about the availability of reliable data for the system to take informed decisions. Extra caution is highly recommended for data collection and processing.  The management must take proper measures to address the challenges such as validation and ethical requirement of data before using AI and ML in the area of professional skepticism and judgment. Most of the respondents have an opinion that their organization are slow in updating technology in the field of auditing. It is recommended that management must be proactive in bringing up to date technology for better output. Most of the responded have agreed that they find implementation of AI and ML in auditing as an opportunity to migrate to a new spectrum in the filed of auditing. It is recommended that management also consider this as an opportunity to upgrade themselves to new technologies.

The authors declare that they have no conflict of interest

No funding sources

The study was approved by the , University of Technology and Applied Sciences, Higher College of Technology, Sultanate of Oman.

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