Marek, what are the transformational changes that evolved the face of KPMG's audit services in recent years?

Marek Gajdziński: The changes in auditing are multidimensional. Above all, the development of modern technology is accelerating. The dynamic digital transformation affects our clients, their businesses and financial systems, as well as us – the auditors. Companies are digitalizing, which has a direct impact on financial statements. The increasing complexity of financial processes creates the need to introduce significant changes to the audit of financial statements.

"Auditors at KPMG, thanks to the use of modern technological tools, including AI, are now able to perform in-depth tests on entire populations of financial data (often consisting of millions of individual transactions), instead of examining selected statistical samples, as was previously the case."

MindBridge, one of the AI-based tools used by KPMG, scans all transactions included in the financial statements and identifies those of high-risk for auditors to focus on, analyse, and test it. We are now able to analyse 100% of the transactions carried out during the year, whereas using previous statistical methods, we tested only a fraction of them. Advances in technology give key stakeholders of financial statements a greater level of confidence in audited financial statements.

An additional benefit of the use of modern technological solutions is the possibility of presenting the results of analyses made in the process of verification of hundreds of thousands or millions of transactions. This provides the supervisory board, audit committee and management of the audited entity with a transparent summary of transactional risks. This is a major added value of audit done by KPMG.

What are the benefits of modern technology-based tools for KPMG clients?

Marek Gajdziński: The companies we audit are looking at much more comprehensive feedback from the audit of their financial statements. The role of the auditor and the feedback provided is crucial for audit committees and supervisory boards, which have oversight on the correctness of the financial statement process, while their involvement in its preparation is inherently limited. As an independent auditor, we analyse the financial processes of the audited company and we share our observations and recommendations with these bodies.

Audit has always been a multidisciplinary area, because in order to understand and assess the financial statements, it is necessary to comprehend business processes in the audited companies, operating in different industries. Today, this profession is becoming even more multidisciplinary, as the auditors need to have an extensive knowledge and skills of increasingly complex technological solutions and the regulatory landscape of both auditors and audited companies.

At the same time, business processes are becoming increasingly complex. In today's world, when working on the audit of financial statements, auditors are supported by specialists in IT, law, tax, valuations and financial instruments, and others. With the introduction of a requirement to verify non-financial ESG (Environment, Social, Governance) reporting, this group will include experts in new areas, and at the same time expand the multidisciplinary of the audit profession.

Should auditors be concerned that artificial intelligence (AI) will replace their work at some point in its development?

Marek Gajdziński: The audit profession is likely to be one of the biggest beneficiaries of the development of AI. Through its use, auditors will spend much less time on the tedious and time-consuming collection, reconciliation and processing of data extracted from audited companies, which will themselves gradually adopt AI tools. Auditors, on the other hand, will be able to focus on analysing and testing transactions that AI tools identify as high-risk.

With the development of AI, auditing will become even more attractive to those embarking on a career to become statutory auditors. The time required to perform a large number of repetitive tasks will be reduced to a minimum. The auditor will be the operator of the application, thanks to which he or she will be able to more quickly analyse the results obtained, identify risks, errors, formulate conclusions.

It is worth emphasising again – artificial intelligence supports the work of the auditor, but does not replace it. In our profession, there has always been and will always be a need for a final assessment by an experienced auditor that is based on all available information and procedures. As AI develops, the final assessment will be based on a much bigger number of analysed and tested transactions.

What is KPMG building its competitive advantage on in the audit area?

Marek Gajdziński: Our ambition is to be the most trusted and trustworthy auditor by the broad community of capital and financial market participants. Our strategy to continuously build clients’ confidence in us is based on the three pillars: quality, operational excellence and continuous development of our employees' competences. The proper alignment of these three areas determines our market position and effectiveness.

Thanks to the implementation of KPMG's global audit technology solution Clara Workflow last year, we now have the most modern and comprehensive 'audit operating system', which for the past few months has also been underpinned by an 'AI Chatbot' function that will revolutionise the audit user experience of our employees. Our competitive advantage is based on technological solutions and employees using these technologies, which enable us to offer the highest quality services to our clients.

Are the new audit obligations for non-financial statements an opportunity or a challenge for auditors?

Marek Gajdziński: The CSRD, in force since 2024, requires companies to report non-financial information grouped around three themes and to have these reports verified by an independent auditor. This opens up extremely exciting new growth opportunities for auditors, going far beyond the traditional area of auditing historical financial statements. With the support of ESG specialists, the auditors will verify both the correctness of the calculation of individual non-financial information and assess and test the internal control systems and IT systems that collect this information in companies and capital groups.

Expanding the expected competencies of auditors also presents an opportunity to attract new talent, who had not previously considered working in audit. I am convinced that making the verification of ESG reports a general obligation will contribute to the much-needed increase in the social and environmental responsibility of business entities and minimise the so-called greenwashing. As a result, companies for which responsible ESG policy is a priority will enjoy greater trust from investors, counterparties and consumers. At the same time, we are aware of the great responsibility that rests on the shoulders of the auditors who will verify the ESG reports.