Detecting bias in audit

Let’s say you need to make a doctor appointment because you have a problem and you’re unsure what you need to do to solve it.

What if the doctor you were about to see had a tendency to push for unnecessary surgeries that patients often didn’t need like removing organs or limbs?  How would you feel about seeing this particular doctor?

You’d run away as fast as possible right?  There’s clearly a concerning bias from the service provider that you need to be objective.


Unfortunately, we see a similar pattern all too frequently in the accounting industry when it comes to performing a financial audit.

In 2019, Deloitte was performing audit services for a company called Autonomy.

Ultimately, the Financial Reporting Council had determined that the partner in charge at Deloitte had “consciously lost his objectivity” and as such was “reckless” and “seriously misleading” in their reporting to regulators.

We’re not talking small potatoes here either.  Autonomy was in the process of being acquired by Hewlett-Packard for almost $12B.

The report found that the Deloitte partner became so close to senior executives at Autonomy that he started to “act as an advocate” for them.

Get our awesome product content delivered daily-ish to your inbox

This event became one of the biggest accounting scandals in British corporate history.  Many of the parties involved are facing jail time and billions in fines.


So why am I telling you this story?

As it turns out, intelligent automation is expected to be able to help us identify whether or not we are able to maintain our independence and relative freedom from bias when performing services related to audit.

Our communications with clients and other activity can indicate any number of patterns which can trigger a warning that said individual has “lost their objectivity”.

It’s going to be a powerful tool in avoiding these disasters in the future.

PS. Read more about the Deloitte and Autonomy debacle.

Talk soon,

Find this advice helpful? I send out a short message every day to help accounting firms learn how to boost their profit without needing to hire more CPAs.

Join my growing list of subscribers below