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The head of Anthropic is making the point that AI adoption across white-collar job roles will be more subtle than previous estimates. What is clear is that AI will impact on the white-collar job market, but in one’s opinion, it will be more similar to the transformation that took place in manufacturing in the 1990s and 2000’s and the adoption of Lean and Six Sigma, than the wholesale destruction of white-collar roles.
AI is improving process efficiency, it is rapidly removing non-value-added activities across many organisations. E.g. we can all use AI to write a presentation or undertake data analytics. But AI is making slow progress into knowledge-based areas such as audit, where quality, risk, efficiency, and alignment of scope are critical success factors for adoption. What we will not see is AI automating 90% of jobs across all knowledge industries, where the human in the loop provides a significant amount of intellectual capital in problem resolution. Why, because AI can automate the simple, but it struggles with the complex.
There’s a lot to be said about the Jevons paradox when one considers the adoption of AI by the audit industry. Especially when you add the increased exposure of boards to regulatory compliance, which requires audit assurance. You add the lack of human capital needed to perform audit assurance over cybersecurity. You add in the need for AI to satisfy criteria, including quality, risk, efficiency, and scope. Where if AI gets audit assurance outcomes wrong, then legal risk increases, and herein lies the problem of AI and the knowledge industry.
For internal audit Ai is a perfect example of AI adoption. If AI can improve efficiency, manage risk, improve quality, and adapt to audit scope. With a backdrop of increased demand and low human capital, then in part, it will align with Jevons’ Paradox as AI efficiency will drive demand.
Efficiency, quality, risk management, and adherence to scope will stimulate demand, with a little help from regulatory compliance and human capital.
Liz Sandwith CFIIA Ryan Buckner
@Parava Security Solutions The Institute of Internal Auditors Chartered Institute of Internal Auditors
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