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AI technology in inspections, why not?
Artificial intelligence (AI) technology is gradually becoming an important tool in many professions, and the inspection industry is no exception. AI can assist inspection agencies in enhancing work efficiency, minimizing errors, and improving the ability to detect fraudulent and wrongful activities.
Big Data analysis and automated inspections
First of all, it must be mentioned that AI can completely analyze big data and automate inspections, which plays an important role in helping inspection, auditing, and monitoring agencies process enormous amounts of data more quickly, accurately, and efficiently. AI technologies not only assist in searching, analyzing, and detecting anomalies in data but also help automate inspection processes, minimize manual intervention, and optimize the working time of inspectors.
In auditing work, agencies often have to deal with a large amount of financial, accounting, contract, tax report, and other documents. AI can assist in analyzing these massive datasets much more quickly and accurately than manual methods. AI algorithms can identify patterns, trends, and anomalies in data that might be overlooked if examined using traditional methods.
AI can also use machine learning algorithms to detect anomalies in financial reports or financial transactions. For example, AI can identify transactions with signs of fraud or violations of accounting regulations that auditors or inspectors might overlook.
A real-world example is that tax inspectors can use software like Trifacta or Talend to analyze the tax reports of large businesses, detecting signs of tax fraud through the analysis of transactions and financial reports.
Detecting fraud and misconduct
In addition, detecting fraud and misconduct is one of the important applications of AI technology in inspection and auditing work, especially in the fields of finance, taxation, banking, and areas related to asset management, transactions, and legal processes.
AI can help detect fraudulent activities, misconduct, and unusual patterns in data that humans may find difficult to identify in a timely manner. Through machine learning to detect fraud, AI can be trained to recognize signs of fraud based on historical data.
AI systems can scan financial transactions, payment records, and data from buying and selling transactions to detect unusual behaviors. For example, if there is a series of repeated transactions with unreasonable values or a sudden change in the trading behavior of an individual, the AI system will alert the inspector.
AI can perform text analytics on reports, contracts, and other documents to detect suspicious keywords or patterns. AI tools such as natural language processing (NLP) can scan through legal documents or reports to look for signs of misconduct or regulatory violations.
Tools like SAS Fraud Detection or FICO Falcon Fraud Detection use machine learning to detect unusual financial transactions and fraud in payment or banking systems.
Forecasting and risk analysis
Perhaps many people imagine that forecasting and risk analysis can only be done by humans, but no, forecasting and risk analysis are among the powerful applications of AI technology in the fields of inspection, auditing, and financial management.
This technology helps organizations, inspection agencies, and businesses forecast potential risks, thereby enabling them to prepare preventive measures or mitigate damage when those risks occur. AI assists not only in analyzing current data but also in predicting future events and behaviors that could cause risks or damage.
AI algorithms can analyze trends in data and use predictive models to identify high-risk areas, helping regulatory agencies focus on sectors or businesses with a higher risk of non-compliance. For example, AI can predict companies that are highly likely to be detected for tax violations or fraudulent activities based on historical data and macroeconomic factors.
AI can use data from various sources (including online platforms, financial reports, market data) to assess external factors that may influence the likelihood of regulatory violations by an organization or individual.
KPMG and EY (Ernst & Young) use machine learning tools and data analysis to forecast and assess tax fraud risk for their clients. Their AI system can analyze financial indicators from multiple companies simultaneously to identify high-risk tax evaders.
Optimizing the Audit Process
Optimizing the inspection process is one of the important applications of AI technology in enhancing the efficiency of inspection and auditing work for organizations, government agencies, or businesses. The traditional inspection process often consumes time, effort, and resources, but AI can help automate many steps in the process, from data collection and analysis to detecting anomalies and making more accurate and quicker conclusions.
AI can help automate steps in the inspection process, such as document classification, identifying points to be inspected, and generating reports. This helps reduce the time and effort of inspectors, while ensuring that the inspection work is carried out accurately and efficiently.
AI systems can automatically compile and generate audit reports after analyzing data, helping to reduce manual work and ensure consistency in the reports.
Companies like UiPath and Automation Anywhere provide RPA tools that can be deployed in inspection processes to automate administrative tasks, thereby increasing the speed and efficiency of work.
Decision support and policy analysis
Another highlight is that AI can fully support decision-making and policy analysis, which is one of the important applications of AI technology in the fields of public management, economics, and business administration.
AI technology helps government agencies, organizations, businesses, and policymakers analyze complex data, optimize decision-making processes, and formulate evidence-based and effective policies. The application of AI in decision support and policy analysis can bring many benefits such as reducing errors, improving transparency, and enhancing forecasting capabilities.
AI can help inspectors make quicker and more accurate decisions by providing information based on data analyses that have been conducted. AI systems can assist in analyzing complex situations, providing predictions about the outcomes of specific actions, and supporting more accurate decision-making.
AI can be used to analyze current policies and laws, helping inspectors better understand the regulations related to their work and predict the impact of legal changes on the businesses or organizations being inspected.
Specifically, in financial and tax audits, AI can fully assist tax agencies and financial inspectors in making more accurate decisions regarding resource allocation, identifying high-risk areas, and making decisions on handling violations. For example:
The IRS (Internal Revenue Service) Intelligent Processing System: The IRS (Internal Revenue Service) has used AI and machine learning to analyze tax reports from millions of businesses, detect anomalies in tax data, and help the agency decide which cases need closer inspection. AI analyzes indicators such as unusually low expense ratios, unreasonable high income, or cross-border transactions without reasonable evidence, thereby helping inspectors make informed decisions.
Or AI can support tax policy analysis in South Korea, where the South Korean government has implemented AI systems to simulate and analyze the impact of new tax policies on the economy. AI analyzes macroeconomic data and the tax behaviors of businesses over a long period to help policymakers assess the impact of tax adjustments. This helps the government make decisions about adjusting tax policies in the most reasonable way for the economy and businesses.
Chatbot and automated interactions
Chatbot uses AI to simulate conversations with users, answer questions, and provide automated support. Chatbot can be deployed on platforms such as websites, mobile applications, social media, and customer relationship management systems. (CRM).
AI chatbot can assist inspectors in quickly finding information, answering frequently asked questions, and providing guidance related to the inspection process. This helps reduce the administrative workload for inspectors.
AI chatbots can also assist in providing information and answering questions from businesses or citizens about regulations and inspection procedures, helping to enhance the transparency and accessibility of the inspection system.
Taxbot of HMRC (Her Majesty’s Revenue and Customs) is a chatbot used to answer questions from businesses and citizens about taxes. It uses NLP to understand and answer questions about tax procedures, thereby reducing the workload for employees.
Enhance security and monitoring
With the rapid development of cyber attack methods and potential threats, AI plays a crucial role in improving the ability to detect, prevent, and respond to security incidents. AI solutions can provide a more robust security system, automatically detect abnormal behaviors, and help mitigate risks for organizations and individuals.
AI can help detect signs of cyber attacks or security breaches in the systems of auditing organizations. AI tools can analyze network traffic, search for suspicious behavior patterns, and provide timely alerts about threats.
In addition, AI can monitor financial systems or critical infrastructure to detect signs of fraud or suspicious activity in real-time, helping regulatory agencies to identify and respond promptly to incidents.
Darktrace is a company that provides security solutions using AI to detect and respond to cybersecurity threats in real-time. Darktrace’s solutions use machine learning algorithms to identify abnormal behaviors in the network, thereby helping to protect inspection systems from attacks.
In summary, inspectors can fully utilize AI tools to support their inspection and auditing processes, such as:
• RPA (Robotic Process Automation): RPA can automate repetitive administrative tasks in the inspection process, such as data collection and processing, document storage, and information classification.
• NLP (Natural Language Processing): This technology helps analyze and understand natural language in documents, emails, reports, or contracts to detect unusual patterns or words indicative of fraudulent behavior.
• Machine Learning and Deep Learning: These algorithms can learn from historical data to predict high-risk areas or automatically detect signs of fraud without human intervention.
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It can be said that AI technology can help the inspection industry be more efficient, accurate, and faster in processing information, detecting fraud, and analyzing data. The application of AI not only enhances the ability to detect misconduct but also helps save time, optimize workflows, and support accurate decision-making. With the development of AI, inspection work can become more transparent, more accurate, and more efficient in the future./.
Source: Newspaper
