Hackathon 2: Season 2 - UC 2 | Audit Documentation using AI | CA. Rahul Shivkumar Dharne

Summary

In this insightful presentation, C. Rahul Darh G explores the innovative use of ChatGPT in streamlining audit documentation for private limited companies. He outlines a comprehensive approach that includes generating an audit checklist, risk assessment matrices, and scoring models for internal controls. The presentation also highlights the creation of essential documents like engagement and management representation letters, enhancing compliance and efficiency in auditing processes. By leveraging AI, the framework aims to simplify and improve audit practices for Chartered Accountants, showcasing a practical application of technology in financial oversight.

Takeaways

• 😀 The presentation focuses on using ChatGPT for creating audit documentation.
• 📋 An audit documentation checklist is developed for private limited companies with specific capital and turnover limits.
• 📝 A risk assessment matrix is generated to evaluate the internal control system of private limited companies.
• 🔍 The matrix categorizes risks based on likelihood and impact, helping to identify potential control gaps.
• ❓ A questionnaire for risk assessment is created, covering asset management, liability management, financial reporting, compliance, and governance.
• 🏆 A scoring model is proposed for evaluating internal controls, assigning points based on the strength of controls in various areas.
• 📊 The scoring system helps categorize risks into high, moderate, low, and minimal risk categories.
• 📥 An Excel or CSV format is generated to systematically organize the risk assessment questionnaire and scoring.
• ✍️ An engagement letter template is drafted for auditors and clients, ensuring compliance with peer review guidelines.
• 📅 An audit plan is created for the upcoming financial year, based on previous financial performance.

Q & A

What is the main focus of Rahul's presentation?

The main focus of Rahul's presentation is on using ChatGPT for audit documentation, specifically for private limited companies.

What specific financial thresholds are mentioned for the private limited companies?

The financial thresholds mentioned are a capital of less than two crores and a turnover of less than twenty crores.

What types of documents are generated using ChatGPT in the presentation?

Documents generated include an audit documentation checklist, risk assessment matrices, questionnaires, engagement letters, audit plans, and management representation letters.

How does the risk assessment matrix help auditors?

The risk assessment matrix categorizes risks based on their likelihood and impact, aiding auditors in evaluating the internal control systems of companies.

What scoring system is proposed for assessing internal controls?

The scoring system assigns points based on the strength of controls: 0 points for no control, 1 for weak, 2 for adequate, and 3 for strong control.

What categories are included in the risk assessment questionnaire?

The questionnaire covers categories such as asset management, liability management, financial reporting, compliance, and governance.

What is the purpose of the engagement letter mentioned in the presentation?

The engagement letter serves to outline the responsibilities of both the auditor and the client, ensuring clarity in the auditing process.

How does the presentation suggest preparing for the audit of the next financial year?

The presentation suggests preparing an audit plan based on the financials of the previous year to inform the audit objectives and scope.

What role does ChatGPT play in drafting the management representation letter?

ChatGPT assists in drafting the management representation letter to confirm the completeness of financial information and compliance with legal standards.

Why is the use of ChatGPT considered beneficial for Chartered Accountants?

Using ChatGPT streamlines the documentation process, enhances efficiency, and ensures that audit documentation meets professional standards.