ARTIFICIAL INTELLIGENCE IN PUBLIC SECTOR AUDITING: OPPORTUNITIES, RISKS, AND ETHICAL CONSIDERATIONS
Keywords:
Artificial Intelligence, Public Sector Audit, Opportunities, Risks, Ethical ConsiderationsAbstract
This study aims to explore the opportunities, risks, and ethical considerations in the application of artificial intelligence (AI) to public sector audit practices using a literature review method. The development of digital technology has driven the adoption of AI as a potential tool for improving efficiency, accuracy, and early detection of fraud and non-compliance in state financial management. Through a review of previous research, this article highlights the potential of AI in expanding audit scope, accelerating data analysis processes, and enhancing the accountability of public institutions. However, significant challenges remain, including the risk of algorithmic bias, limited regulations governing the use of AI, and the potential for diminished auditor independence. Furthermore, ethical aspects such as data protection, transparency in AI-based decision-making, and auditor moral responsibility remain fundamental issues that must be addressed. This study concludes that the use of AI in public sector audits must be placed within a robust governance framework, accompanied by adaptive regulations and clear ethical guidelines to maximize the opportunities generated without compromising the principles of accountability and integrity.
Downloads
References
Aldemİr, C., & Uysal, T. U. (2024a). AI COMPETENCIES FOR INTERNAL AUDITORS IN THE PUBLIC SECTOR. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2312001
Aldemİr, C., & Uysal, T. U. (2024b). AI COMPETENCIES FOR INTERNAL AUDITORS IN THE PUBLIC SECTOR. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2312001
Alexiadou, A. S. (2024). Chapter 16: Artificial intelligence in public sector services: ethical issues. https://www.elgaronline.com/edcollchap/book/9781035301973/book-part-9781035301973-26.xml
Artificial Intelligence | Proceedings of the 12th International Conference on Theory and Practice of Electronic Governance (world). (n.d.). ACM Other Conferences. https://doi.org/10.1145/3326365.3326420
Artificial Intelligence in Public Procurement: Legal Frameworks, Ethical Challenges, and Policy Solutions for Transparent and Efficient Governance | Alkebulan: A Journal of West and East African Studies. (n.d.). Retrieved September 24, 2025, from http://gnosipublishers.com.ng/index.php/alkebulan/article/view/24
Ayibam, J. N. (2025). Artificial Intelligence in Public Procurement: Legal Frameworks, Ethical Challenges, and Policy Solutions for Transparent and Efficient Governance. Alkebulan : A Journal of West and East African Studies, 5(2), 54–69.
Beyond principles: Embedding ethical AI risks in public sector risk management practice | Proceedings of the 25th Annual International Conference on Digital Government Research (world). (n.d.). ACM Other Conferences. https://doi.org/10.1145/3657054.3657063
Bouchetara, M., Zerouti, M., & Zouambi, A. R. (2024). LEVERAGING ARTIFICIAL INTELLIGENCE (AI) IN PUBLIC SECTOR FINANCIAL RISK MANAGEMENT: INNOVATIONS, CHALLENGES, AND FUTURE DIRECTIONS. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2377351
Bracci, E. (2022). The loopholes of algorithmic public services: An “intelligent” accountability research agenda. Accounting, Auditing & Accountability Journal, 36(2), 739–763. https://doi.org/10.1108/AAAJ-06-2022-5856
Bracci, E., Tallaki, M., & Ebua Otia, J. (2025a). Propensity factors of artificial intelligence technology adoption by public sector auditors. Journal of Public Budgeting, Accounting & Financial Management, 1–28. https://doi.org/10.1108/JPBAFM-09-2024-0189
Bracci, E., Tallaki, M., & Ebua Otia, J. (2025b). Propensity factors of artificial intelligence technology adoption by public sector auditors. Journal of Public Budgeting, Accounting & Financial Management, 1–28. https://doi.org/10.1108/JPBAFM-09-2024-0189
Chowdhury, E. K. (2021). Prospects and challenges of using artificial intelligence in the audit process. In The Essentials of Machine Learning in Finance and Accounting. Routledge.
Erasmus, L. J., & Kahyaoğlu, S. B. (2024). Continuous Auditing with AI in the Public Sector. CRC Press.
Genaro-Moya, D., López-Hernández, A. M., & Godz, M. (2025a). Artificial Intelligence and Public Sector Auditing: Challenges and Opportunities for Supreme Audit Institutions. World, 6(2), 78. https://doi.org/10.3390/world6020078
Genaro-Moya, D., López-Hernández, A. M., & Godz, M. (2025b). Artificial Intelligence and Public Sector Auditing: Challenges and Opportunities for Supreme Audit Institutions. World, 6(2), 78. https://doi.org/10.3390/world6020078
Genaro-Moya, D., López-Hernández, A. M., & Godz, M. (2025c). Artificial Intelligence and Public Sector Auditing: Challenges and Opportunities for Supreme Audit Institutions. World, 6(2), 78. https://doi.org/10.3390/world6020078
Lois, P., Drogalas, G., Karagiorgos, A., & Tsikalakis, K. (2020). Internal audits in the digital era: Opportunities risks and challenges. EuroMed Journal of Business, 15(2), 205–217. https://doi.org/10.1108/EMJB-07-2019-0097
Mikhaylov, S. J., Esteve, M., & Campion, A. (2018). Artificial intelligence for the public sector: Opportunities and challenges of cross-sector collaboration. Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences, 376(2128), 20170357. https://doi.org/10.1098/rsta.2017.0357
Mökander, J. (2023). Auditing of AI: Legal, Ethical and Technical Approaches. Digital Society, 2(3), 49. https://doi.org/10.1007/s44206-023-00074-y
Munoko, I., Brown-Liburd, H. L., & Vasarhelyi, M. (2020a). The Ethical Implications of Using Artificial Intelligence in Auditing. Journal of Business Ethics, 167(2), 209–234.
Munoko, I., Brown-Liburd, H. L., & Vasarhelyi, M. (2020b). The Ethical Implications of Using Artificial Intelligence in Auditing. Journal of Business Ethics, 167(2), 209–234.
Omoteso, K. (2012). The application of artificial intelligence in auditing: Looking back to the future. Expert Systems with Applications, 39(9), 8490–8495. https://doi.org/10.1016/j.eswa.2012.01.098
Rajput, A. (2024). Leveraging Artificial Intelligence and Big Data in Public Accounting: Redefining Audit Practices and Financial Reporting. International Journal of Research Publication and Reviews, 5(11), 5516–5531. https://doi.org/10.55248/gengpi.5.1124.3341
Riana, N., Mulyani, S. R., & Aripin, Z. (2024). ASSESSING THE IMPACT OF ARTIFICIAL INTELLIGENCE ON FINANCIAL AUDITING AND RISK ASSESSMENT. KRIEZ ACADEMY : Journal of Development and Community Service, 1(10), 38–56.
Sattlegger, A., & Bharosa, N. (2024). Beyond principles: Embedding ethical AI risks in public sector risk management practice. Proceedings of the 25th Annual International Conference on Digital Government Research, 70–80. https://doi.org/10.1145/3657054.3657063
Schiff, D. S., Kelley, S., & Ibáñez, J. C. (2024). The emergence of artificial intelligence ethics auditing. Big Data & Society. https://doi.org/10.1177/20539517241299732
Taşdöken, Ö. (2024a). USE OF ARTIFICIAL INTELLIGENCE AND AUDIT ANALYTICS IN INTERNAL AUDIT PROCESSES IN THE PUBLIC SECTOR. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2376790
Taşdöken, Ö. (2024b). USE OF ARTIFICIAL INTELLIGENCE AND AUDIT ANALYTICS IN INTERNAL AUDIT PROCESSES IN THE PUBLIC SECTOR. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2376790
Taşdöken, Ö. (2024c). USE OF ARTIFICIAL INTELLIGENCE AND AUDIT ANALYTICS IN INTERNAL AUDIT PROCESSES IN THE PUBLIC SECTOR. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2376790
Taşdöken, Ö. (2024d). USE OF ARTIFICIAL INTELLIGENCE AND AUDIT ANALYTICS IN INTERNAL AUDIT PROCESSES IN THE PUBLIC SECTOR. EDPACS. https://www.tandfonline.com/doi/abs/10.1080/07366981.2024.2376790
Ulugbek, Y. (2025a). THE ROLE OF ARTIFICIAL INTELLIGENCE IN AUDITING PUBLIC SECTOR COMPANIES. ASIA PACIFIC JOURNAL OF MARKETING & MANAGEMENT REVIEW ISSN: 2319-2836 Impact Factor: 8.071, 14(06), 10–21.
Ulugbek, Y. (2025b). THE ROLE OF ARTIFICIAL INTELLIGENCE IN AUDITING PUBLIC SECTOR COMPANIES. ASIA PACIFIC JOURNAL OF MARKETING & MANAGEMENT REVIEW ISSN: 2319-2836 Impact Factor: 8.071, 14(06), 10–21.
Ulugbek, Y. (2025c). THE ROLE OF ARTIFICIAL INTELLIGENCE IN AUDITING PUBLIC SECTOR COMPANIES. ASIA PACIFIC JOURNAL OF MARKETING & MANAGEMENT REVIEW ISSN: 2319-2836 Impact Factor: 8.071, 14(06), 10–21.
