EY Arms Auditors With AI as Firm Aims to Sustain Quality Gains

EY has equipped its audit teams with new artificial intelligence capabilities that the Big Four accounting firm says will advance the quality of its work scrutinizing the risks and revenues of some of the world’s largest companies.

AI-backed tools deployed this year allow EY auditors to assess computer code that drives corporate financial reporting safeguards and to pinpoint risks facing their clients from a sea of external information. More capabilities using autonomous agents that can complete tasks independently are set to come online next year.

Artificial intelligence has the potential to upend accounting and shine a brighter light on fraud and other risks for auditors tasked with vetting the profits of public companies worth trillions. For Ernst & Young LLP, the latest tech promises to build on what the firm anticipates will already be a dramatic improvement in its annual audit inspection results.

“The future of audit is here now,” said Richard Jackson, EY Americas chief technology officer and the AI leader for the firm’s global assurance practice. Those new AI capabilities are “turbocharging” EY’s work to improve its auditing, he said in an interview with Bloomberg Tax.

The firm’s US arm said earlier this month that it is expecting its best audit quality scorecard from the Public Company Accounting Oversight Board since 2009 after struggling for years to bring down deficiencies in routine audits. The firm has predicted that its pending 2025 inspection report will show that less than 10% of its audits fell short of US standards—a sharp improvement from a 28% deficiency rate in its latest published report card.

The turnaround follows a multi-year effort to standardize how EY teams perform audits across regions and sectors for a book of clients that includes Apple Inc. and Alphabet Inc. That more consistent approach has contributed to the firm’s improved inspections results, Jackson said.

Central teams now focus on thorny accounting for impairments and business combinations while others track potential conflicts of interest. The firm also tackles more than two-thirds of its work before a client’s fiscal year closes. EY previously culled its book of audit clients in a bid to bolster its work, among other improvement efforts.

Future inspection cycles will reflect the benefits of leveraging AI tools that came online this year and allow the firm to sustain its quality results, Jackson said. “It’s not a one-and-done,” he said.

Billion-Dollar AI Boost

EY is just the latest Big Four firm to adopt the technology behind generative AI tools like ChatGPT and put it to work auditing financial statements for their clients. The four accounting firms have invested heavily to put the latest generation of AI into the hands of their professionals, aiming to streamline audit processes and better serve clients.

EY’s US arm committed $1 billion to boost the pay of young recruits and to invest in AI. The funding is in addition to a separate global pledge to spend $1.4 billion on the emerging tech.

The firm’s auditors around the globe now tap gen AI to query a vast library of technical accounting and auditing guidance. Another tool helps auditors match figures on client financial statements with the firm’s own internal documents, a fundamental task known as the “tie-out.”

More is in the works—the firm plans to roll out autonomous tools backed by AI agents next year targeting lower risk areas of the audit, Jackson said.

EY’s top competitors have similarly adopted the technology to free up their accountants to focus on work involving more judgment and technical accounting know-how.

AI agents are currently at work at PwC LLP, also known as PricewaterhouseCoopers. Auditors in August began using an automated planning tool that pulls in records from the previous audit and updates risks facing its clients. Other agents support PwC’s process for testing controls and financial statements, the firm said.

KPMG LLP earlier this year introduced AI agents that automate routine tasks, freeing up auditors to focus on higher risk areas, the firm said. The firm has also added to its gen AI roster since launching a risk monitoring tool and other capabilities in 2024.

Deloitte LLP is also working to weave agentic AI into its audit workflow. Drafting accounting memos and financial statement tie-outs are just a few of the ways its auditors are leaning on gen AI, the firm said in July.