KPMG is redefining the audit with agentic AI using Azure

An audit is defined by rigor, relying on sampling data and manual documentation. As financial complexity grows, enhancing processes is essential to deliver high audit quality, maintain regulatory compliance, and strengthen client confidence.

Building on Azure, KPMG created KPMG Clara AI to modernize member firm audit process, analyzing entire datasets and deploying new capabilities globally without re-architecting for each jurisdiction, to scale innovations securely and efficiently.

With 95,000 auditors working across member firms in more than 140 countries, KPMG is working to transform its industry, using AI to deliver high standards of accuracy with tools designed to fundamentally change how audits are performed.

Auditing is a profession defined by rigor, precision, and a deep-rooted commitment to excellence. KPMG is showing how AI can elevate this discipline, helping drive innovation and transformation across the industry.

Traditional audits relied on sampling small portions of data and manual documentation. But these methods can’t keep pace with today’s financial complexities to ensure regulatory compliance and client confidence. With 95,000 auditors working across 140 countries, KPMG set out to modernize a global process, while maintaining the highest standards of accuracy, compliance, and trust.

Creating the foundation for KPMG Clara AI 

 KPMG’s transformation began with KPMG Clara, its cloud-based smart audit platform used on every KPMG audit worldwide. Built on Microsoft Azure, KPMG Clara uses Azure AI Foundry to modernize the audit process, from analyzing entire datasets to automating documentation and surfacing insights in real time. These capabilities allow auditors to move beyond sampling and focus on high-risk areas with greater accuracy and speed. 

 “We needed to scale insights while ensuring trust. Through collaboration with Microsoft, we’re using today’s and tomorrow’s technologies for KPMG Clara. This helps KPMG professionals to work to provide our highest levels of audit quality by increasing our ability to focus on the issues that matter,” says Scott Flynn, Global Head of Audit at KPMG International. 

 KPMG Clara AI is the centerpiece of this transformation, empowering professionals with a modern data and application platform that features agentic AI.  

“We needed to scale insights while ensuring trust. Through collaboration with Microsoft, we’re using today’s and tomorrow’s technologies for KPMG Clara. This helps KPMG professionals to work to provide our highest levels of audit quality by increasing our ability to focus on the issues that matter.”

Scott Flynn, Global Head of Audit, KPMG International

Enhancing capabilities further with AI 

 KPMG Clara AI runs reliably on .NET 8 and Azure App Service with robust safeguards in place. Supporting its core applications globally, KPMG can deploy new capabilities without re-architecting for each jurisdiction, scaling innovations with advanced security and efficiency. 

 “Azure App Service gives us peace of mind by automatically patching and updating our runtime environment. This ensures our .NET applications remain stable and highly secure, without the need for manual intervention from our developers,” explains Sebastian Stöckle, Global Head of Audit Innovation and AI at KPMG International. 

 Azure Cosmos DB manages chat history, session data, and agent memory with service-level agreements and regional redundancy. Together, this application and data foundation means KPMG Clara AI can reliably deliver enterprise-scale innovation with broad-ranging security in one of the most regulated industries in the world. 

 “Azure Cosmos DB is foundational for us. It gives our audit teams the ability to work with massive, distributed datasets in real time, while helping ensure global consistency and compliance. Without Azure Cosmos DB, scaling AI-powered audits in more than 140 countries and territories would be impossible,” says Stöckle. 

Connectivity at the core of KPMG Clara AI 

On top of this foundation, KPMG Clara AI uses advanced capabilities from Azure AI Foundry, including Azure AI Content Understanding to analyze documents and extract attributes. It uses Azure AI Search to ground agents in enterprise data through retrieval-augmented generation, along with models from Azure OpenAI in Foundry Models and Cohere for specialized reasoning.  

For its agentic capabilities, KPMG Clara AI is built on Semantic Kernel, the predecessor of the Microsoft Agent Framework. Azure AI Foundry Agent Service is also planned for adoption in the next version. It will use grounding with Bing Search and Semantic Kernel, so auditors can build and orchestrate custom agents that automate substantive testing, documentation, and other audit procedures. 

The shift toward automation provided by agentic AI is also transforming the role of auditors, requiring them to develop new skills in data analysis and technology. KPMG firms are committed to equipping their auditors with the necessary training and tools to thrive in this new environment.

KPMG Clara AI is also tightly aligned with the next-generation, open-source Microsoft Agent Framework, built on the convergence of Semantic Kernel and AutoGen. This modular software development kit provides a unified, extensible runtime for multi-agent workflows, open standards interoperability, and use with any cloud or on-premises environment.  

This means KPMG Clara AI can connect specialized agents to enterprise data and tools while benefiting from built-in safeguards and an open, extensible developer ecosystem. The framework’s open-source connectors allow agents in KPMG Clara AI to interoperate not only with Azure AI Foundry, but also with external systems and language models, making it possible to scale multi-agent collaboration across a global, regulated enterprise. 

 “Foundry Agent Service and Microsoft Agent Framework connect our agents to data and each other, and the governance and observability in Azure AI Foundry provide what KPMG firms need to be successful in a regulated industry,” explains Stöckle.   

 With Microsoft Agent Framework, KPMG is betting on an enterprise-grade platform that combines developer accessibility with the governance, safety, and observability needed for compliance-heavy industries. 

“Foundry Agent Service and Microsoft Agent Framework connect our agents to data and each other, and the governance and observability in Azure AI Foundry provide what KPMG firms need to be successful in a regulated industry.”

Sebastian Stöckle, Global Head of Audit Innovation and AI, KPMG International

From sampling to full-scale insights and beyond 

 KPMG Clara AI empowers KPMG’s audit professionals to focus more closely on high-risk areas, sector-specific risks, and challenges, benefiting both stakeholders and capital markets. Whole-dataset analysis has replaced traditional sampling. This analysis improves accuracy and surfaces hidden risks. Audit walkthroughs are faster, with AI-generated process flows and narratives. Additionally, routine tasks such as data reconciliation, transaction testing, and documentation review are automated. As a result, auditors can spend more time engaging with clients on high-value issues and exercising professional judgment. 

These advances are underpinned by the highly secure cloud infrastructure of Azure, which supports KPMG Clara AI’s ability to analyze larger datasets, identify risks earlier, and deliver deeper insights. The use of AI agents and automation has improved productivity and transformed the auditor’s role. KPMG’s tens of thousands of audits every year ingest petabytes of structured and unstructured financial and non-financial data from all types and sizes of organizations. With access to these modern capabilities, 95,000 auditors around the world are empowered to concentrate on interpreting results, making strategic decisions, and engaging more deeply with clients.

Leading the future of auditing 

KPMG’s strategic alliance with Microsoft is setting a new standard for the future of auditing through advanced digital transformation. Earlier this year, KPMG announced further advances of AI integration in KPMG Clara, using AI agents to automate tasks and enhance decision-making, including substantive procedures and the Financial Report Analyzer AI engine.

Driven by a mutual dedication to innovation, both organizations are investing in next-generation technology solutions that deliver scalability and measurable impact. Underpinning KPMG’s cross-functional AI investment strategy is KPMG Workbench; an open multi-agent AI platform designed to transform client delivery and enhance the way KPMG professionals work. Developed in collaboration with Microsoft, KPMG Workbench harnesses AI to develop transformative, scalable applications across KPMG’s global network. 

As KPMG continues to evolve its member firm audit practices, the focus remains on empowering professionals to deliver deeper insights, strengthen client relationships, and raise the bar for audit quality. Technology is not just accelerating processes—it’s making it possible for auditors to concentrate on what matters most. 

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