The government must adopt audit data standards to ensure that the data/information maintained by various departments and agencies can be seamlessly organised for better analysis, Girish Chandra Murmu, Comptroller and Auditor General of India (CAG) said on Wednesday.

Lack of standardisation in the underlying data structures across government IT applications has been one of the major challenges for audit due to the extreme diversification of the platforms/applications and infrastructure used by different government entities, Murmu said at a seminar on ‘Responsible Artificial Intelligence’ in the capital. 

“In many cases, different departments have systems which are incapable of either communicating with each other, or data linkages cannot be made to gain meaningful and actionable information. In this scenario, disaggregated use of AI may lead to conflicting or at worse incorrect inputs for audit conclusions,” Murmu said.

As India holds the Presidency of the G20, the CAG — which is government auditor— is the Chair for the SAI-20– the engagement group of Supreme Audit Institutions (SAI) of the G20. During the chairmanship, SAI-India has chosen two themes — Responsible AI and Blue Economy for deliberations so as to enhance transparency, accountability and good governance.

Murmu highlighted that adopting audit data standards will help not only policymakers and executives, but also auditors in carrying out digital audits. 

Standardisation will significantly aid auditors as extraction of relevant data as per a standardised data export format from the underlying database will be enabled, he said.

To buttress his point on lack of standardisation, Murmu cited the example of enterprise resource planning (ERP) software used by each State-owned enterprise (SOE) having been procured from different vendors.

This would result in a situation where although each SOE prepares financial statements as per the standard format prescribed by the accounting standards, each line item is computed from the underlying data in a non-standardised manner.

“If auditors attempt to execute Big Data analytics or try to apply AI techniques by obtaining the underlying data sets/formats from different SOEs for comparative analysis, there would be significant investment of human effort required,” he said.

This is because a detailed mapping of data definitions, data structures, data storage, data references and how individual line items in the financial statements are compared from different data fields across tables will be necessary, for further analysis by computer algorithms.

Adopting new tech

Murmu highlighted the increasing adoption of new technologies for audit work, in the CAG offices. Through use of AI, CAG offices are trying to go beyond the limitations of traditional audit processes – moving from sample-based audits to auditing the complete population data, and risk-driven sample selection, he added.

Murmu emphasised that in this era of express technological advancement, digital transformation and AI were rapidly becoming the centre of attention for public sector enterprises. Referring to the launch of the Digital India initiative, CAG added that the Government is increasingly focusing on providing access to technology, digital infrastructure, and digital literacy. 

Discussing the advantages of AI, CAG highlighted areas like Health, Education, Taxation, where Digital Transformation and AI driven tech platforms have replaced the repetitive manual processes, brought efficiency through informed policy decisions. He further stressed on the risks like “Bias in the algorithms” and “privacy concerns for the individuals” associated with AI implementation in the public sector companies.