Big Four weighing up new AI audit offerings

Amid an increasingly bloated market for AI-driven tools, verifying those which might actually work for a company is like looking for a needle in a haystack. PwC, EY, Deloitte and KPMG are reportedly in an arms race to change that, as the Big Four throw resources into establishing themselves as the premier auditors of AI-effectiveness.

Since the public roll-out of OpenAI’s ChatGPT model in late 2022, the biggest players in the professional services sector have rushed to hitch their wagon to the booming artificial intelligence sector. It is not something which so far appears to have paid dividends – as while the hype around the technology’s potential remains, the largest consultancies have seen revenues flatline – and resorted to waves of layoffs, and hiring freezes to preserve flagging profit margins.

For all the hypothetical power of AI, on a practical basis, it has yet to prove its value in many business cases. There is no killer app, beyond an endless wave of re-skinned chatbots, and even when they do move to adopt it, many firms struggle to find ways they could enjoy returns on the investment – meaning most projects are trapped in the experimentation phase. So, while the economic turmoil top consulting firms have faced might have still had a negative impact on their sales, as most clients do not move to full implementation or scaling of AI, the advisory industry’s pivot to the technology has not softened that economic blow.  

Reports originally from The Financial Times suggest the Big Four may still be about to find a way of capitalising on this, though. Leveraging their reputations as experts in audit, PwC, EY, Deloitte and KPMG are said to be rushing to develop AI assurance services – letting their clients know which AI products are trustworthy, and which are not.

Even as consultants continue to talk up the potential of AI, there has been a shift in emphasis among the general public’s perception of the technology. The early amazement at automatically generated images or text of any kind has waned, as technology firms have sought to get consumers and businesses to pay for offerings which are often glitchy. This has gone as far as some insurers even offering policies covering potential losses from malfunctioning AI services.

At the same time, the move may mirror the quartet’s previous expansion into assurance for environmental, social, and governance (ESG) metrics. In this case, the Big Four may also be anticipating greater regulation for the technology space – which firms will need to comply with, when engaging with new AI tools.

To that end, Richard Tedder, an audit partner at Deloitte, told The Financial Times that AI assurance as “critical” for widespread AI adoption. This is especially the case for businesses relying on AI for crucial functions, and individual consumers using AI for personal matters such as health or finance.

Leading the charge, according to reports in the press, is PwC – whose UK wing is poised to launch its AI assurance services. Marc Bena, chief technology officer for audit, noted that the firm already undertakes some work assessing specific client AI tools. This includes checking chatbot accuracy and identifying issues like bias.

Demand for these services is not new. Currently, hundreds of UK firms offer some form of AI assurance. As indicated by government research, however, this is often provided by AI developers themselves, raising questions about independence – as well as standardisation of the assurance provided.

Leading audit firms come from a highly standardised space – and so might be well positioned to offer services that customers feel more confident in. However, many of them are no strangers to alleged conflicts of interest – having been heavily criticised for offering accounting and advisory services to clients previously. They would also happen to have a huge range of partnerships with a number of the largest providers of AI tools already, so the extent to which they are independent from the industry might also raise a few eyebrows in the coming years.