KPMG builds AI agents into audit platform

Big Four firm KPMG announced that it has built several new AI agents into its global smart audit platform Clara, with plans to develop more in the future. 

While the precise definition can vary depending on who is asked, very broadly, an AI agent is a software that is capable of at least some degree of autonomy to make decisions and interact with tools outside itself in order to achieve some sort of goal — whether booking a flight, sending a bill or buying a gift — without constant human guidance. Agents are not necessarily new, but the rise of generative AI has made them much easier to make and use, as doing so no longer requires specialized coding skills. 

The AI agents deployed in this release will support standardizing and automating various aspects of the audit process and include substantive procedures such as expense vouching, search for unrecorded liabilities and accrued expenses. Overall, they are intended to handle repetitive and time-consuming tasks, such as data analysis and document review; provide auditors with insights and recommendations based on data analysis, helping them make informed decisions and improve audit quality; and allow auditors to dedicate more time to high-risk areas and sector-specific challenges. 

KPMG plans to deploy additional AI agents over the next 12 months, which will be integrated into controls testing procedures, financial statement analysis and more. "We're continuing to build out our AI capabilities with increasingly sophisticated agents in KPMG Clara to enable our auditors to more effectively respond to risks and deliver deeper audit insights," said Scott Flynn, KPMG US's vice chair of audit. "As we accelerate our adoption of this innovative technology and deploy new capabilities, we are maintaining a high level of professional skepticism and upskilling our professionals to drive trust in the capital markets."

These upgrades coincide with the release of a new Financial Report Analyzer (FRA) AI engine, which provides AI-generated output to enable auditors in completing required disclosure checklists and mark the next phase of our accelerated effort to deliver an AI-enabled, people-powered audit experience. 

The announcement comes shortly after KPMG, along with other Big Four firms, announced deals with Google Cloud and its Agentspace platform, which will help clients build integrated and scalable AI platforms to enhance decision-making and effectively manage AI agents. These solutions will leverage Agentspace, Vertex AI Agent Builder, and Agent Development Kit. KPMG will also work with Google Cloud to develop new AI capabilities and systems for joint clients through Google Cloud's Agent2Agent (A2A) interoperability protocol. The partnership will affect many parts of KPMG as a whole, but the firm noted the impact it will have on its banking clients and its new law practice.