For example, I recently read an article in Het Financieele Dagblad about the use of language software by an investment institution, in predicting price movements. In short, it comes down to looking for hidden messages in language used by board chairmen, for example in conversations with analysts. The use of positively and negatively labeled words is counted and compared with that of other organizations. Investment choices are then made based on the results. Coastal intelligence supports the continuous improvement of this language software.
Many things went through my mind while reading this article and one of them was, whether this can start to be used in interviews with auditees. The second thought, right after that, was whether this is desirable. On the one hand, it can offer interesting insights into the auditee's actual situation that might otherwise remain hidden. The other side is that, in my interpretation, it functions virtually as a lie detector. And do you really want to approach your colleagues that way (and do they want to be approached that way)?
As so often, with the advancement of technical capabilities comes the immediate question of the desirability of their use. Just look at the recent discussion regarding the use of facial recognition software by the police in the United States (Amazon does not want to supply this software to the police for a year due to the lack of proper legislation regarding this and various parties fear abuse).
With the advent of all kinds of new techniques, the Internal Audit profession will in all likelihood face these kinds of choices more often. I wish my colleagues (and myself) much wisdom and courage in making these difficult decisions.
Marc van Heese is a partner at ARC People, a specialist in Internal Audit, Risk & Compliance.