The transformation to data analytics in Big-Four financial audit: what, why and how?

Abstract

Purpose This study aims to explore the implementation of data analytics in the Big-Four accounting firms, including the extent to which a digital transformation is changing the work of financial auditors, why it is doing so and how these firms are managing the transformation process. Design/methodology/approach The authors conducted 23 interviews with 20 participants across four hierarchical levels from three of the Big-Four accounting firms in New Zealand. Findings The firms have entered the era of “smart audit systems”, in which auditors provide deep business insights that are communicated more effectively through data visualisation. The full potential, however, of data analytics depends not only on the transformation process within accounting firms but also on improvement in the quality of IT systems in client companies. The appointment of transformation managers, the recruitment of technology-savvy graduates and the provision of extensive training are helping to embed data analytics in the Big-Four firms. Accounting graduates in financial audit now need to show that they have the aptitude to become “citizen data scientists”. Practical implications The findings explain how data analytics is being embraced in the Big-Four auditing firms and underline the implications for those who work in them. Originality/value The findings challenge the “technological reluctance” thesis. In contrast, the authors observe a climate of positive attitudes towards new technology and accompanying actions in the Big-Four firms. The authors show how branches of the Big-Four firms operating distantly from their global headquarters, and with smaller economies of scale, are implementing the new technologies that characterise their global firms.

Guest editorial: Accounting in transition: influence of technology, sustainability and diversity

“…Effect of technology on the nature of work of accountants Digital transformation at the workplace is changing the work of financial auditors as observed by Liew et al (2022) in their exploratory study on the implementation of data analytics in the Big-Four accounting firms. The authors find a climate of positive attitude towards new technology and accompanying actions in the Big-Four firms and that financial auditors are providing deep business insights through data visualisation.…”

Digital transformation in Vietnam: the impacts on external auditors and their practices

“…Through technology such as the Internet of Things, artificial intelligence (AI), virtual reality, social networking, cloud computing, mobile and distributed big data analytics, these advances have transformed the real world into a digital world. In auditing, digital transformation started from the 2000s and remains the current trend in the automation and data exchange in production technology (Liew et al, 2022). Technological advancements, using new audit tools and techniques have been a valuable addition to the audit profession (Sung et al, 2023).…”

“…Although the calls for further research have been responded to by some recent studies on auditing and technology (e.g. Salijeni et al, 2021;Kend and Nguyen, 2022;Liew et al, 2022), that research has focused on more developed countries such as the UK, New Zealand and Australia. Developing countries have largely been overlooked by this emerging research on auditing and technology; yet such countries face distinct issues that the developed countries do not regularly encounter, if at all.…”

“…We aim to contribute to the auditing literature by considering the developing country of Vietnam and do so by excursing into the socio-political environment of Vietnam, with some argumentation on the features of the Vietnamese context. This will provide a new angle on the developments already captured in the extant audit literature (Liew et al, 2022;Kend and Nguyen, 2022). We do not just focus on the global Big Four firms as some prior studies have (e.g.…”

Muhasebe denetiminde büyük veri analizi kullanımına yönelik güven tutumunun incelenmesi: Nitel bir araştırma

“…In the study conducted to determine the changes of digital transformation on auditors' work, it has been observed that four large audit companies have a positive attitude towards new technologies and accompanying actions (Liew, Boxall, and Setiawan, 2022).…”