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A company adopts AI-driven natural language processing to review draft financial statements. Which of the following is the BEST view of using NLP for compliance with Ind AS?
ANLP can flag potential disclosure gaps and inconsistencies, but the responsibility for completeness, accuracy and judgement-based disclosures under Ind AS remains with management and the auditor
BNLP independently certifies Ind AS compliance, eliminating the need for management's Ind AS compliance certification
CNLP is useful only for tax compliance and cannot read Ind AS financial statements
DNLP replaces the need for an Independent Directors' Audit Committee under SEBI LODR
Answer & Solution
Correct answer: A. NLP can flag potential disclosure gaps and inconsistencies, but the responsibility for completeness, accuracy and judgement-based disclosures under Ind AS remains with management and the auditor
The chapter positions AI/NLP as a productivity and quality-control layer — flagging issues, generating drafts — but ultimate responsibility for the financial statements remains with management; the auditor's professional judgement is not displaced. AI cannot certify compliance and is not limited to tax.
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