KUALA LUMPUR (June 14): EY is expanding the use of drones — with artificial intelligence (AI) built in — in its inventory observations, as part of its digital audit capabilities.

For this, it launched a global proof of concept or POC, an extensive pilot project that will use pioneering industry technology to improve the accuracy and frequency of inventory count data collection.

The use of drones in the inventory count allows for more data to be captured, said EY in a statement today. This will allow audit teams to focus on identifying areas of risk, rather than manually capturing stock counts.

"Innovating the stock count process using ground-breaking drone technology, AI and machine learning will create a capability that can further benefit EY audit stakeholders," it said.

It said the cloud-based asset tracking platform, which is powered by an Internet of Things (IoT) sensor network, will analyse inventory quantities in real time by reading quick response (QR)/barcode/rack labels and feeding this information directly into EY Canvas, the EY Assurance global audit digital platform that seamlessly connects over 80,000 auditors.

"The POC will initially be used in both the manufacturing and retail sectors. Audits for automotive manufacturers, for example, will use the drones to conduct an automated count of vehicles at manufacturing plants.

"In retail sector audits, for a warehouse stock count, the drones will work autonomously while using variable image and object recognition tools such as optical character recognition and QR/barcode/rack labels to collect inventory information, especially during off-hours to minimise audit stakeholder risk and improve efficiency," said EY.

EY Global Assurance Digital Leader Hermann Sidhu said EY has been testing the use of drones in the audit process for several months and that the findings have been "compelling".

"It's now time to scale our testing globally across multiple sectors, as we know that many audits can benefit from the use of this innovative technology. It's just one of many ways that we are working to embed the very latest technologies into our audit processes to further improve audit quality," he said.

"We are investing heavily in the development of new technologies that can enhance the quality of our audit process. Our primary function is to build trust and confidence in the capital markets, and digitalising these types of tasks in our audits means that we can improve not only audit quality, but also provide deeper business insights that further benefit our stakeholders," added Felice Persico, EY Global Vice Chair — Assurance.