Understanding usage and value of audit analytics for internal auditors: An organizational approach

Li, He; Dai, Jun; Gershberg, Tatiana; Vasarhelyi, Miklos A.

doi:10.1016/j.accinf.2017.12.005

Cited by 103 publications

(100 citation statements)

References 43 publications

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“…With regard to the strategic orientation, our results are consistent with those of Li et al (2018) and Verma and Bhattacharyya (2017)'s findings that the major reason for the non-adoption of BDA was that companies did not realise the strategic value of BDA, and they were not ready to make changes due to technological, organisational and environmental difficulties. Therefore, we conclude that a company's strategic orientation and structure may also be important influential factors concerning the use of BDA.…”

Section: Comparison and Discussion Of The Resultssupporting

confidence: 89%

“…This means that external auditors have to gain understanding of the client's environment and performance in a very short time; hence, BDA might be a useful tool. While Li et al (2018) emphasised that only internal auditors should have more demand for the use of audit analytics in order to be efficient and effective, the high prices and competition in the external audit market are very important factors motivating the need to be more effective and implementing more analytics. From the interviews, we may summarise that audit clients seek: a) to negotiate for better pricing because of high competition in the audit market, and b) to get more value and insights about corporate risks and performance.…”

Section: Comparison and Discussion Of The Resultsmentioning

confidence: 99%

“…Environment, as a contingency factor, may constitute the market and its associated factors, such as prices, products, competition, government policies and so on (Wickramasinghe and Alawattage, 2007). Environment (as a contingency) may constitute the audit market's uncertainty and its associated factors, such as audit fees, competition and regulators' policies, such as the attitudes of those setting the standards (Li et al, 2018). Looking at the BDA's influence from the external auditing point of view, audit market regulators play a particularly important role in ensuring audit companies' public quality aspects and enhancing the use of data analytic tools.…”

Section: The Theoretical Frameworkmentioning

confidence: 99%

“…Firstly, it adds to the small body of research by offering an empirical investigation the state-of-the-art of BDA usage and motivating factors in external auditing. While prior studies (for example, Li et al, 2018) have focused on internal auditing, this paper addresses BDA and external auditors in particular. In addition, Verma and Bhattacharyya (2017) found that complexity and perceived costs were the inhibitors that prevented the adoption of BDA in business companies, while our research results indicated that the factors mentioned above were not critical.…”

Section: Contributionmentioning

confidence: 99%

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Motivation to use big data and big data analytics in external auditing

Dagilienė

Klovienė

2019

MAJ

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Purpose This paper aims to explore organisational intentions to use Big Data and Big Data Analytics (BDA) in external auditing. This study conceptualises different contingent motivating factors based on prior literature and the views of auditors, business clients and regulators regarding the external auditing practices and BDA. Design/methodology/approach Using the contingency theory approach, a literature review and 21 in-depth interviews with three different types of respondents, the authors explore factors motivating the use of BDA in external auditing. Findings The study presents a few key findings regarding the use of BD and BDA in external auditing. By disclosing a comprehensive view of current practices, the authors identify two groups of motivating factors (company-related and institutional) and the circumstances in which to use BDA, which will lead to the desired outcomes of audit companies. In addition, the authors emphasise the relationship of audit companies, business clients and regulators. The research indicates a trend whereby external auditors are likely to focus on the procedures not only to satisfy regulatory requirements but also to provide more value for business clients; hence, BDA may be one of the solutions. Research limitations/implications The conclusions of this study are based on interview data collected from 21 participants. There is a limited number of large companies in Lithuania that are open to co-operation. Future studies may investigate the issues addressed in this study further by using different research sites and a broader range of data. Practical implications Current practices and outcomes of using BD and BDA by different types of respondents differ significantly. The authors wish to emphasise the need for audit companies to implement a BD-driven approach and to customise their audit strategy to gain long-term efficiency. Furthermore, the most challenging factors for using BDA emerged, namely, long-term audit agreements and the business clients’ sizes, structures and information systems. Originality/value The original contribution of this study lies in the empirical investigation of the comprehensive state-of-the-art of BDA usage and motivating factors in external auditing. Moreover, the study examines the phenomenon of BD as one of the most recent and praised developments in the external auditing context. Finally, a contingency-based theoretical framework has been proposed. In addition, the research also makes a methodological contribution by using the approach of constructivist grounded theory for the analysis of qualitative data.

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Section: Comparison and Discussion Of The Resultssupporting

confidence: 89%

Section: Comparison and Discussion Of The Resultsmentioning

confidence: 99%

Section: The Theoretical Frameworkmentioning

confidence: 99%

Section: Contributionmentioning

confidence: 99%

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Motivation to use big data and big data analytics in external auditing

Dagilienė

Klovienė

2019

MAJ

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“…Moreover, many auditors are not able to effectively incorporate statistical audit analyses in their work and therefore only use it on an ad-hoc basis (Li, Dai, Gershberg, and Vasarhelyi 2018). Secondly, the auditor must have access to software that is easy-to-use and performs analyses according to the International Standards on Auditing (IFAC 2010c).…”

Section: Introductionmentioning

confidence: 99%

JASP for Audit: Bayesian Tools for the Auditing Practice

Derks¹,

Swart²,

Wagenmakers³

et al. 2019

Preprint

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Statistical theory is fundamental to many auditing guidelines and procedures. In order to assist auditors with the required statistical analyses, and to advocate state-of-the-art Bayesian methods, we introduce JASP for Audit (JfA). JfA is easy-to-use, free-of-charge software that automatically follows the standard audit workflow, selects the appropriate statistical analysis, interprets the results, and produces a readable report. This approach reduces the potential for statistical errors and therefore increases audit quality. Next to the frequentist methods that currently dominate audit practice, JfA incorporates Bayesian counterparts of these methods that come with several advantages. For example, Bayesian statistics allows incorporation of expert knowledge directly into the statistical analyses, allowing for a decrease in sample size, and an increase in efficiency. In sum, JfA is designed with the auditor in mind, it guides the auditor through the statistical aspects of an audit, and therefore has the potential to increase audit efficiency and quality.

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Continuous auditing and data mining for strategic risk control and anticorruption: Creating “fair” value in the digital age

2020

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This paper aims to bridge a gap in the literature by investigating a continuous audit case for anticorruption. The evolution of technology can offer valuable opportunities to integrate legality checks and business processes that are consistent with the growing call to fight corruption at the institutional level. Since the last decade, researchers have proposed conceptual frameworks demonstrating the visible advantages of continuous auditing and data mining, but significant difficulties still exist in practice. This process has been implemented in only a few cases, and the lack of empirical studies implies a need for additional research on this topic. To fill this gap, we adopt the framework proposed by Chan and Vasarhelyi (2011) and identify success factors for the implementation of continuous auditing. For the analysis, we use the research methodology of a single case study and focus on the Italian company Acciai Speciali Terni Spa (AST), the only steelwork company in Europe that has been ISO 37001 certified. This study demonstrates the practical impact of continuous auditing and data mining on strategic risk control by empirically testing the Chan and Vasarhelyi (2011) framework for the specific issue of anticorruption. The results show that effective continuous auditing is centered on an integrative and change management approach and that strategic vision, risk mapping, and a no-corruption culture are among the most influential factors. The AST case demonstrates that technology is currently essential for supporting strategic risk control but only if it is integrated with consistent growth in organizational and managerial capabilities.

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Understanding usage and value of audit analytics for internal auditors: An organizational approach

Cited by 103 publications

References 43 publications

Motivation to use big data and big data analytics in external auditing

Motivation to use big data and big data analytics in external auditing

JASP for Audit: Bayesian Tools for the Auditing Practice

Continuous auditing and data mining for strategic risk control and anticorruption: Creating “fair” value in the digital age

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