SYNOPSIS This paper addresses information processing weaknesses and limitations that can impede the effective use and analysis of Big Data in an audit environment. Drawing on the literature from psychology and auditing, we present the behavioral implications Big Data has on audit judgment by addressing the issues of information overload, information relevance, pattern recognition, and ambiguity. We also discuss the challenges that auditors encounter when incorporating Big Data in audit analyses and the various analytical tools that are currently used by companies in the analysis of Big Data. The manuscript concludes by raising questions that future research might address related to utilizing Big Data in auditing.

The purpose of this study is to discuss the current state and future of auditing. Expert consensus is used as a basis to examine the current state of auditing and generate modifications both needed and likely to occur in the audit profession. This study contributes to the literature by using the Delphi method to develop predictions as to the direction of the audit industry and discuss the implications associated with these predictions. If auditors can better understand where the profession stands and where it is headed, then they can better prepare for the future. Some predictions emerging from this study relative to future audit practices include increasing automation of audit procedures, more predictive financial statements, continuous auditing of financial statements and transactions, and an increasingly global perspective regarding audit activities.

SUMMARY Audited financial statements are intended to be timely and useful in decision making. To remain a valuable and relevant service, auditing must find a way to evolve. This paper summarizes a recent study (“The Future of Audit,” Lombardi, Bloch, and Vasarhelyi [2014]), which conducts an interactive forecasting method to gain expert consensus on the current state of the auditing profession and on how the profession will evolve over the next decade. Expert consensus emerging from the study includes increasing automation of audit procedures, more predictive financial statements, continuous auditing, and maintaining a global outlook on audit transactions. Data Availability: Please contact the corresponding author for data.

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This case investigates the benefits and challenges that come with implementing continuous controls monitoring (CCM). CCM has been considered by the audit and information systems professions for years. However, a primary problem entails how to effectively integrate this methodology within large technological infrastructures. Because of increasing interest in controls monitoring, professional publications have generated information regarding the potential benefits of CCM, thereby creating awareness and addressing practical implementation issues along the way. We analyze the CCM program used by Premier Plasma Center, a global biotherapeutic and biotechnology company. This case is applicable to auditing, accounting information systems, and other business curricula that examine company controls and their monitoring activities. Data Availability: For data availability, please email the corresponding author.

Tools to assist auditors in making sound, complete, and consistent judgements have become increasingly important due to regulation, litigation, and the desire to increase audit effectiveness. Historically, expert systems have been problem specific and created from scratch. Such systems were challenging to update and had limited adaptability when applied to additional problem spaces. If an adaptable system is possible, then costs and time may be reduced related to production, testing, and implementation of quality audit tools. Increased availability of such tools could be a tremendous benefit to auditors. Using a design science research method, this paper describes the process used to create a fraud risk assessment audit tool by embedding audit rules into a generic expert system shell that is widely used in the medical field. The resulting decision and training aid can assist auditors in making fraud risk assessments. While prior research has addressed many components of the issue, the current system was created to address the current risk environment, and a variety of contexts of interest, as the risk environment changes. The system was evaluated by practicing auditors while completing a series of cases. Evaluation results support the benefits of the artifact when used to assist in fraud risk assessments.

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A negative consequence of the COVID-19 pandemic has been the major contraction of the economy. In the United States, this has resulted in a significant reduction in sales tax revenues for most state and local governments, compounded by a surge in online retail shopping caused in part by government-mandated lockdowns. We discuss the question of whether the remote online vendor has any obligation to collect and remit sales taxes on purchases by in-state buyers.