The Audit Implications of Cloud Computing

2020 ◽  
Vol 34 (4) ◽  
pp. 1-31
Author(s):  
Rajiv D. Banker ◽  
Xiaorong Li ◽  
Steven A. Maex ◽  
Wenyun Shi
Keyword(s):  
Cloud Computing ◽  
New Technologies ◽  
Empirical Work ◽  
Accounting Standards ◽  
Data Availability ◽  
Financial Accounting Standards Board ◽  
Accounting Information System ◽  
Audit Efficiency ◽  
Cloud Audit ◽  
Cloud Users

SYNOPSIS Over the last decade, many firms have shifted from in-house managed information systems to cloud computing arrangements. Despite regulatory interest in the audit impact of new technologies, little empirical work has studied how auditors behave when clients introduce cloud platforms into their accounting information system. Ex ante, it is unclear whether cloud computing allows for increased audit efficiency through reliance on service organization control reports or introduces additional complexity and risk to the audit. Leveraging a 2015 accounting standards update from the Financial Accounting Standards Board to identify material cloud users, we find that these firms pay an audit fee premium of approximately 5 percent compared to nonusers. This premium attenuates when hiring an audit office with more cloud users in its portfolio, suggesting that cloud audit experience can reduce auditors' costs when conducting such audits. We also explore how audit lag and subsequent restatements vary cross-sectionally with cloud use. JEL Classifications: M41; M48. Data Availability: Data are available from the public sources cited in the text.

Going Cloud for Agility: Beyond Financial, System, and Control Motives

2015 ◽  
Vol 12 (1) ◽  
pp. 153-167 ◽  
Author(s):  
Hui Du ◽  
Yu Cong
Keyword(s):  
Cloud Computing ◽  
Business Strategy ◽  
Financial System ◽  
Data Availability ◽  
It Outsourcing ◽  
Potential Benefits ◽  
And Control ◽  
Cloud Users ◽  
Unique Dataset

ABSTRACT Using a unique dataset obtained from cloud computing providers' websites, we study cloud computing from the cloud users' perspective. While cloud computing providers promise various benefits for companies to “go cloud,” whether user companies are motivated by the potential benefits is a different matter. Although existing IT outsourcing literature and the latest cloud computing research suggest financial, system, and control as three main motives for companies to go cloud, MIS literature and business strategy studies point out the agility of quick system deployment as another significant consideration. We examine these four categories of motives, along with more detailed key motives developed in each category. Our results indicate that companies are motivated by multifold benefits in all four aspects of agility, financial, system, and control. However, despite various benefits promised by cloud computing providers, from the cloud computing users' perspective, the agility of quick system deployment and saving on costs appear to be the two primary motives. Data Availability: Data are publicly available from the sources identified in the paper.

Compliance and Regulatory Standards for Cloud Computing

2013 ◽  
pp. 54-64 ◽  
Author(s):  
Jitendra Singh ◽  
Vikas Kumar
Keyword(s):  
Cloud Computing ◽  
Accounting Standards ◽  
Third Party ◽  
Sensitive Data ◽  
Privacy And Security ◽  
Regulatory Standards ◽  
Security Standards ◽  
Cloud Users

Cloud computing is expanding in reach, with its utility-based features and enhanced agility. Still, there is a big concern about the privacy and security of the data. Because of these concerns, third-party cloud users are employing the cloud only for less sensitive data, and the advantage of cloud computing is not fully harnessed. In order to ensure the privacy and security of data, proper compliance and regulatory standards become very important for the cloud domain. Although a number of such standards exist for the traditional computing, they must be modified for their wider adoption to the cloud platforms. This chapter considers the worldwide available standards in the technical and non-technical categories for wider coverage of the cloud platforms. In the technical category, security standards presently followed by cloud computing have been discussed, while in the non-technical category, privacy and accounting standards like HIPPA, SAS 70, GAPP, etc. have been considered.

scholarly journals FASB's Not-for-Profit Financial Reporting Project: Analysis of Letters to ASU 2016-14 Exposure Draft

2020 ◽  
Vol 9 (1) ◽  
pp. 45-75
Author(s):  
Donald R. Deis ◽  
Arpita Shroff
Keyword(s):  
Financial Reporting ◽  
Phase 1 ◽  
Accounting Standards ◽  
Data Availability ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
The Public ◽  
For Profit ◽  
Not For Profit

ABSTRACT In 2015, the Financial Accounting Standards Board (FASB) issued an Exposure Draft (ED) as part of its first significant project in over 20 years on financial reporting by Not-for-Profit organizations (NFP). In this study, we categorize the 264 letters received on the ED by the type of respondent and analyze the responses using ANOVA, multiple comparisons tests, and multidimensional scaling. Ultimately, as Phase 1 of its NFP project, FASB issued accounting standards update (ASU) 2016-14 containing proposed changes supported by a majority of the respondents to the ED. The Board deferred recommended changes with less support from respondents to Phase 2 of the project. Although constituents often accuse accounting standard setters of standards-overload and for being unresponsive to their comments (Herz 2003), our findings indicate otherwise. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G00; L31; M40.

Amortized Cost for Operating Lease Assets

2012 ◽  
Vol 27 (1) ◽  
pp. 51-74 ◽  
Author(s):  
Ross Jennings ◽  
Ana Marques
Keyword(s):  
Accounting Standards ◽  
Cash Flows ◽  
Data Availability ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Present Value ◽  
Financial Ratio ◽  
Straight Line ◽  
Operating Leases

SYNOPSIS: A proposed accounting standard issued jointly by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) would require firms to recognize many more lease assets than are currently required and to amortize those assets on a straight-line basis. A number of respondents to the exposure draft argue that the “front-loading” of lease expense resulting from straight-line amortization would not reflect the economics of the lease assets. This study compares straight-line amortization with the most-often cited alternative, present value amortization. First, we illustrate by example that under stylized conditions, present value amortization provides information that more faithfully represents the future cash flows of lease assets than straight-line amortization. Second, for a large subset of firms that are more likely to conform to the stylized conditions in our example, we find that investors value those firms as though the lease assets are capitalized and amortized on a present value basis. Finally, we find that financial ratio comparability is substantially increased when operating leases are constructively capitalized and amortized using straight-line amortization, and further increased when using present value amortization. Taken together, these results provide no evidence for favoring straight-line amortization over present value amortization as the default method for amortizing capitalized operating leases. Data Availability: Data used in this paper are publicly available.

scholarly journals Research on the Development of CPA Audit from the Perspective of Artificial Intelligence

2021 ◽  
Vol 251 ◽  
pp. 01056
Author(s):  
Guangxiu Zhou
Keyword(s):  
Artificial Intelligence ◽  
Cloud Computing ◽  
New Technologies ◽  
General Trend ◽  
Emerging Technology ◽  
Internet Technology ◽  
Audit Efficiency ◽  
Artificial Intelligence Technology ◽  
The Times

In the context of the continuous development of Internet technology, big data, Internet of things, cloud computing and other technologies have developed rapidly, and artificial intelligence technology has emerged as the times require. The development of new technologies has promoted social change. As soon as artificial intelligence technology is put forward, it has been widely concerned by the society. Artificial intelligence is like a double-edged sword. As an emerging technology, it is constantly influencing all walks of life, and its application in the field of audit has become the general trend. Under the Background of the rise of artificial intelligence, this paper puts forward the advantages of the combination of artificial intelligence and audit, and analyzes the challenges faced by the development of CPA audit industry, seize the opportunity of the times, actively apply artificial intelligence technology, give practical suggestions for the long-term development of the audit industry, in order to improve the audit efficiency and ensure the audit effect.

scholarly journals Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on FASB Exposure Draft of Proposed Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material

2016 ◽  
Vol 10 (2) ◽  
pp. C1-C9
Author(s):  
Urton L. Anderson ◽  
Marcus M. Doxey ◽  
Marshall A. Geiger ◽  
Willie E. Gist ◽  
Diane J. Janvrin ◽  
...  
Keyword(s):  
Accounting Standards ◽  
Financial Statements ◽  
Data Availability ◽  
Financial Accounting ◽  
Financial Statement ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Stated Objective ◽  
Auditing Standards ◽  
The Way

SUMMARY On September 24, 2015 the Financial Accounting Standards Board (FASB) solicited public comments on a proposed Accounting Standards Update of the FASB Accounting Standards Codification. The stated objective is to improve the effectiveness of footnote disclosures to financial statement users. The focus of the Update is to clarify the way materiality should be considered when assessing requirements for providing information in the notes. The comment period ended on December 8, 2015. This commentary summarizes the contributors' views on these amendments. Data Availability: The exposure draft of Proposed Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material is available at: http://www.fasb.org/cs/ContentServer?c= Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176166402325

Data Integrity Techniques in Cloud Computing: An Analysis

2017 ◽  
Vol 7 (8) ◽  
pp. 121 ◽  
Author(s):  
Neha Thakur ◽  
Aman Kumar Sharma
Keyword(s):  
Cloud Computing ◽  
Cloud Storage ◽  
Data Integrity ◽  
Advantages And Disadvantages ◽  
Security Models ◽  
Cloud Storage Service ◽  
Storage Service ◽  
Cloud Users ◽  
It Enterprises

Cloud computing has been envisioned as the definite and concerning solution to the rising storage costs of IT Enterprises. There are many cloud computing initiatives from IT giants such as Google, Amazon, Microsoft, IBM. Integrity monitoring is essential in cloud storage for the same reasons that data integrity is critical for any data centre. Data integrity is defined as the accuracy and consistency of stored data, in absence of any alteration to the data between two updates of a file or record.  In order to ensure the integrity and availability of data in Cloud and enforce the quality of cloud storage service, efficient methods that enable on-demand data correctness verification on behalf of cloud users have to be designed. To overcome data integrity problem, many techniques are proposed under different systems and security models. This paper will focus on some of the integrity proving techniques in detail along with their advantages and disadvantages.

AN ACCOUNTANT'S EDUCATION

2003 ◽  
Vol 30 (1) ◽  
pp. 155-196 ◽  
Author(s):  
George J. Staubus
Keyword(s):  
20Th Century ◽  
Accounting Standards ◽  
Financial Accounting ◽  
University Of Chicago ◽  
Financial Accounting Standards Board ◽  
Decision Usefulness ◽  
Market Simulation ◽  
Broad Field ◽  
The University

This is a review of how various experiences in my career have contributed to my understanding of accounting. I recall the circumstances surrounding several of my efforts towards the development of accounting theories, viz. (1) decision-usefulness theory, (2) activity costing, and (3) market simulation accounting, as well as my excursion into (4) market association research in seeking to validate decision-usefulness theory and (5) a search for the effects of firms' economic environments on the development of enterprise accounting in the 2nd millennium, C.E. I give my impressions of several of the important players in the evolution of accounting thought in the 20th century with whom I was closely associated, such as Vatter, Moonitz, Chambers, and Sterling, as well as other prominent figures in the broad field of accounting. Some of my gains from associations with three institutions—the American Accounting Association, The University of Chicago, and the Financial Accounting Standards Board—are identified. I conclude with a few summary thoughts on what I have learned.

THE EVOLUTION OF THE RELATIONSHIP BETWEEN THE US FINANCIAL ACCOUNTING STANDARDS BOARD AND THE INTERNATIONAL ACCOUNTING STANDARD SETTERS: 1973–2008

2012 ◽  
Vol 39 (1) ◽  
pp. 1-51 ◽  
Author(s):  
Robert J. Kirsch
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Working Relationships ◽  
International Accounting ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Staff Members ◽  
The Us ◽  
The Relationship

ABSTRACT Utilizing archival materials as well as personal interviews and correspondence with personnel of the Financial Accounting Standards Board (FASB) and International Accounting Standards Committee/Board (IASC/B), including former Board chairmen and staff members, this paper examines the development of the working relationships between the FASB and the IASC/B from their earliest interactions in 1973 through the transformation of the IASC into the IASB and the Convergence Program rooted in the 2002 Norwalk Agreement up to 2008.

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