This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies. Read our privacy policy to learn more.


Data analytics helps auditors gain deep insight Logo aicpa

  Maria L. Murphy, CPA, and Ken Tysiac |   Free |   AICPA |   13 Apr 2015 |   Journal of Accountancy

Advances in data analytics allow financial statement auditors to get more in-depth information about their clients’ businesses. Learn more about how data analytics can enhance the audit process.

Topics covered:
  • Management accounting: Technical: Risk management & internal control: Risk response & reporting, Intermediate
  • Assurance: Technical: Audit: Data analytics, Foundational
  • IT management & assurance: Technical: IT risk & assurance services: Evidence gathering, Foundational
  • Forensic & valuation services: Technical: Data analytics, Foundational
  • Management accounting: Digital skills: Data analytics, Foundational

2 Comments/Reflections

Ismat Osman

Ismat Osman Jan 2018

Data analytics could make it possible for external financial statement auditors to improve audits by:
  • Testing complete sets of data, rather than just testing samples.
  • Aiding risk assessment through identification of anomalies and trends, perhaps even through comparison to industry data, pointing auditors toward items they need to investigate further.
  • Providing audit evidence through comprehensive analysis of organizations’ general ledger systems.
The possibilities for data analytics technology to change auditing are explored in the white paper Reimagining Auditing in a Wired World, published by the Emerging Assurance Technologies Task Force of the AICPA Assurance Services Executive Committee (ASEC).
According to the white paper:
  • The profession needs to achieve a “quantum leap” to redesign audit processes using today’s technology, rather than using information technology to computerize legacy audit plans and procedures.
  • Existing auditing standards that are the framework for audit procedures need to be modified to incorporate the concepts of Big Data and “continuous auditing” and encourage auditors to use technologies that increase assurance beyond minimum required levels.
“That’s important for us as standard setters to stay on top of that, such that the technology and potential uses of it in auditing don’t get ahead of where the auditing standards are,”
ASEC, meanwhile, has established audit data standards to identify key information needed and provide a common framework for audits. These voluntary IT standards create a standardized format for data fields (e.g., naming, formatting, and levels of data fields) and files that are commonly requested from auditors, with the theory being that if file formats are standardized, any company’s system would be capable of producing them in the standardized format. The audit data standards are available at
Thanks to technology, audit procedures such as bank confirmations, analytical procedures, and journal-entry testing do not have to be performed on-site by local audit teams. Instead, these tasks can be outsourced to remote teams of specialists and third-party providers, creating opportunities for auditors to focus on higher-risk areas and the potential for fraud.
Tendai Nyakurimwa

Tendai Nyakurimwa Sep 2016

This article is informative. It helps accountants to know where technology is taking them. It's true internal audits have improved due to use of big data. However, external auditors are still embrace the full use of big data.

It is very helpful to have continuos audits so as to act as an early warning sign to areas that need attention. It is also useful to have standardized formats for auditor information. This will make the audit faster and much easier. 

You may also be interested in: