Data analytics in auditing: Opportunities and challenges

Earley, Christine E.

doi:10.1016/j.bushor.2015.05.002

Cited by 190 publications

(145 citation statements)

References 7 publications

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“…Many scholars have lamented the lack of big data in auditing (e.g., Acito and Khatri (2014) 2015). Earley (2015) acknowledges that big data could be a game-changer in auditing, and Schneider, Dai, Janvrin, Ajayi, and Raschke (2015) predict that data analytics will significantly change the way auditors work. Cao et al (2015) contend that big data can improve financial statement audits.…”

Section: Auditingmentioning

confidence: 99%

Big data techniques in auditing research and practice: Current trends and future opportunities

Gepp¹,

Linnenluecke²,

O'Neill³

et al. 2018

Journal of Accounting Literature

224

150

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This paper analyzes the use of big data techniques in auditing, and finds that the practice is not as widespread as it is in other related fields. We first introduce contemporary big data techniques to promote understanding of their potential application. Next, we review existing research on big data in accounting and finance. In addition to auditing, our analysis shows that existing research extends across three other genealogies: financial distress modelling, financial fraud modelling, and stock market prediction and quantitative modelling. Auditing is lagging behind the other research streams in the use of valuable big data techniques. A possible explanation is that auditors are reluctant to use techniques that are far ahead of those adopted by their clients, but we refute this argument. We call for more research and a greater alignment to practice. We also outline future opportunities for auditing in the context of real-time information and in collaborative platforms and peer-to-peer marketplaces.

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Section: Auditingmentioning

confidence: 99%

Big data techniques in auditing research and practice: Current trends and future opportunities

Gepp¹,

Linnenluecke²,

O'Neill³

et al. 2018

Journal of Accounting Literature

224

150

View full text Add to dashboard Cite

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“…The above discussion reveals how BDA is drawn upon by the firms as a basis for broadening the range of services offered to clients, particularly those more advisory in nature, subject to the limits that are imposed by regulation on the joint provision of audit and non-audit services. The manner in which BDA findings are used by firms is therefore relevant to the longstanding debate on whether joint provision can affect the auditor's independence, notwithstanding the increased regulatory constraint of recent years (Earley, 2015). This excerpt from a public report by one of the Big Four firms is particularly revealing in this regard:…”

Section: Auditor-client Relationship In a Data-driven Environmentmentioning

confidence: 99%

“…Our interviewees point out that audit firms' inability to roll out BDA to wider elements of the audit process has much to do with a lack of required competence and expertise among auditors. The firms' senior representatives interviewed commented that their staff are more often than not ill-equipped to deal intelligently with large amounts of information, and commonly face challenges from information overload and the difficulties of distinguishing relevant information (Earley, 2015;Krahel and Titera, 2015)). The large majority of auditors, including those from large firms, do not possess computer programming skills that could instruct BDA to perform various audit tests.…”

Section: The Implications Of Bda For the Conduct Of An Auditmentioning

confidence: 99%

Big Data and changes in audit technology: contemplating a research agenda

Salijeni

Samsonova-Taddei

Turley

2018

Accounting and Business Research

133

123

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This study explores the most recent episode in the evolution of audit technology, namely the incorporation of Big Data and Data Analytics (BDA) into audit firm approaches. Drawing on twenty-two interviews with individuals with significant experience in developing, implementing or assessing the impact of BDA in auditing, together with publicly available documents on BDA published within the audit field, the paper provides a holistic overview of BDA-related changes in audit practice. In particular, the paper focuses on three key aspects, namely: the impact of BDA on the nature of the relationship between auditors and their clients; the consequences of the technology for the conduct of audit engagements; and the common challenges associated with embedding BDA in the audit context. The study's empirical findings are then used to establish an agenda of areas suitable for further research on the topic. The study is one of the first empirical accounts providing a perspective on the rise of BDA in auditing.

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“…One major challenge is data availability, including relevance and integrity of data analysis (27). For many managers and organizations, they may not have the ability to capture data such as computer skills and knowledge, or data may contain noise and asymmetric information problem exists (28).…”

Section: Big Data Analyticsmentioning

confidence: 99%