FORENSIC AUDITING SERVICES IN THE FIFTH INDUSTRIAL REVOLUTION: THE MEDIATED ROLE OF ARTIFICIAL INTELLIGENCE

Contemporary global crises and the rapid technological advancements have exacerbated the levels of uncertainties in financial systems, compelling forensic practitioners to re-analyse the necessity of paradigm shift in forensic auditing practices to adapt to the disruptive realities of the Fifth Industrial Revolution (5IR). Even though artificial intelligence (AI) has revolutionised fraud detection and data analysis, significant gaps remain in understanding its ethical, operational, and regulatory implications. This study adopts a scoping review methodology to systematically map peer-reviewed literature (2018–2024) on AI’s merits (e.g., efficiency, fraud detection) and challenges (e.g., data bias, ethical concerns) in forensic auditing. The study’s findings underscore the crucial role of adaptability in contemporary forensic auditing practices providing valuable key insights for forensic practitioners and entities confronting disruptors technologically. The study further reveals that AI-based forensic auditing can potentially assist the accuracy, efficiency in forensic investigations, identifying patterns and fraud risks in financial data, quicker detection of fraudulent activities and mitigating fraud risks. However, AI-based forensic auditing poses major challenges such as the quality and quantity of financial data that AI systems entirely depend on, the dire need of human expertise to validate the forensic output or evidence of AI generated systems. Another potential challenge revealed is inadequate and incomplete data which subsequently lead to invalid conclusions. Furthermore, the issue of privacy and ethical concerns, bias and accountability arise when AI-based forensic auditing systems are used to identify and detect fraudulent activities. This study proposed a remote forensic auditing framework-based conceptualised model in a disruptive environment. Policymakers are urged to develop robust legal frameworks to address ethical and regulatory gaps in AI-driven forensic auditing.