AUI3704
ASSIGNMENT 4 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 2025
, AUI3704
Assignment 4 Semester 1 2025
Unique Number:
Due Date: 2025
Managing the Internal Audit Activity
COMPULSORY QUESTION
Topic 1: Ethical Use of AI in Internal Audit
Introduction
The integration of Artificial Intelligence (AI) into the internal audit profession has
transformed how audits are planned, conducted, and managed. AI technologies offer
unmatched capabilities in automating tasks, analysing large data sets, and identifying
anomalies that could indicate risks or fraud. However, as AI becomes more embedded
in auditing processes, ethical considerations become increasingly important. Issues
such as transparency, accountability, data privacy, and bias in algorithms demand
careful evaluation. This essay critically examines how AI can be used ethically in
conducting an internal audit (1.1) and in managing the internal audit function (1.2), with
reference to established ethical frameworks, professional standards, and academic
literature.
1.1 How Can AI Be Used Ethically in Conducting an Internal Audit?
Enhancing Audit Quality through AI
AI tools can automate repetitive tasks, perform predictive analytics, and detect fraud
risks with greater efficiency and speed than traditional manual methods (Moffitt et al.,
2018). For example, machine learning algorithms can identify irregularities in financial
ASSIGNMENT 4 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 2025
, AUI3704
Assignment 4 Semester 1 2025
Unique Number:
Due Date: 2025
Managing the Internal Audit Activity
COMPULSORY QUESTION
Topic 1: Ethical Use of AI in Internal Audit
Introduction
The integration of Artificial Intelligence (AI) into the internal audit profession has
transformed how audits are planned, conducted, and managed. AI technologies offer
unmatched capabilities in automating tasks, analysing large data sets, and identifying
anomalies that could indicate risks or fraud. However, as AI becomes more embedded
in auditing processes, ethical considerations become increasingly important. Issues
such as transparency, accountability, data privacy, and bias in algorithms demand
careful evaluation. This essay critically examines how AI can be used ethically in
conducting an internal audit (1.1) and in managing the internal audit function (1.2), with
reference to established ethical frameworks, professional standards, and academic
literature.
1.1 How Can AI Be Used Ethically in Conducting an Internal Audit?
Enhancing Audit Quality through AI
AI tools can automate repetitive tasks, perform predictive analytics, and detect fraud
risks with greater efficiency and speed than traditional manual methods (Moffitt et al.,
2018). For example, machine learning algorithms can identify irregularities in financial
