Author: Dr. Madan Mohan

In our [previous article on Microsoft Copilot], we explored how Microsoft Copilot is transforming internal audits through automation, natural language queries, and real-time risk monitoring. By integrating AI within everyday Microsoft 365 tools, auditors can now focus on insights rather than manual tasks. Building on that foundation, this article examines how Copilot connects with ERP and CRM systems to deliver deeper, data-driven audit intelligence.

ERP integration

ERP systems house critical financial, operational, and compliance data. Copilot can tap into modules like:

• Finance: Analyse general ledger entries, budget variances, and cash flow.
• Procurement: Review vendor contracts, purchase orders, and payment terms.
• Inventory: Track stock movements, shrinkage, and valuation discrepancies.

By connecting Copilot to ERP, auditors gain a holistic view of business operations and can perform cross-functional audits with ease.

CRM integration

CRM systems provide insights into customer behaviour, sales performance, and service quality. Copilot can:

• Identify gaps in customer onboarding or contract compliance.
• Analyse sales trends and detect anomalies in discounting or commissions.
• Review customer complaints and resolution timelines for quality audits.

This helps auditors assess not just financial integrity but also customer-centric processes.

Use cases of Copilot in internal audits

1. Financial audit
Copilot can reconcile accounts, detect fraudulent transactions, and validate financial statements against ERP data. It can also assist in preparing audit schedules and confirming compliance with accounting standards.

2. Operational audit
By analysing workflows and KPIs from ERP systems, Copilot can identify inefficiencies, bottlenecks, and areas for process improvement. It can also simulate “what-if” scenarios to test operational resilience.

3. Compliance audit
Copilot can cross-reference organisational policies with actual practices, flagging non-compliance in areas like data privacy (e.g., GDPR), procurement, or labour laws. It can also help track corrective actions and audit closure.

4. IT and cybersecurity audit
Integrated with Microsoft Defender and Azure Security Centre, Copilot can:

• Monitor access logs and detect unauthorised activities.
• Review patch management and system vulnerabilities.
• Generate cybersecurity posture reports for audit committees.

Challenges and considerations

While Copilot offers immense potential, organisations must address:

• Compliance: Internal audit teams must ensure that AI usage complies with local regulations, especially when handling sensitive financial or personal data.
• Data leakage: AI tools often rely on cloud-based infrastructure and may inadvertently expose sensitive audit data if not properly configured.
• Emerging threats: Without proper oversight, AI-generated outputs may mislead audit conclusions or overlook critical risks.

• Change management: Auditors need training to effectively use Copilot and adapt to AI-driven workflows.
• Multidomain expert: To develop a comprehensive system that automates the entire audit cycle, an expert with deep knowledge of ERP, CRM, and audit processes and as well as proficiency in Copilot integration is essential.

Future outlook

As Microsoft continues to enhance Copilot with Generative AI, predictive analytics, and industry-specific models, the role of internal auditors will evolve from data reviewers to strategic advisors. Audits will become more continuous, intelligent, and aligned with business goals.

Microsoft Copilot, when integrated with ERP and CRM systems, is a game-changer for audits. It empowers auditors with real-time insights, automation, and collaboration tools that elevate the audit function from reactive to proactive. By leveraging AI, businesses can ensure transparency, mitigate risks, and drive continuous improvement across all functions.

How can BDO help?

BDO brings deep domain expertise in audit and a proven track record in leveraging Microsoft Copilot across Microsoft 365, Dynamics 365 and the Power Platform to help internal audit teams achieve greater efficiency, accuracy and insight. In addition, BDO’s robust Cybersecurity, Data Privacy and Legal practices ensure that all solutions are secure by design and fully aligned with local and global data protection regulations. To explore how your organisation can leverage Microsoft Copilot with BDO’s support, speak to a BDO advisor in your country.