Updating Audit Standard—Enabling Audit Data Analysis

2013 ◽  
Vol 27 (1) ◽  
pp. 325-331 ◽  
Author(s):  
William R. Titera
Keyword(s):  
Data Analysis ◽  
Audit Process ◽  
Private Company ◽  
Continuous Auditing ◽  
External Auditors ◽  
Financial Statement Audit ◽  
Audit Data ◽  
Depth Analysis ◽  
Audit Standard ◽  
Audit Standards

ABSTRACT This paper highlights the emerging role of data analysis on the financial statement audit and its value throughout the audit process, particularly in providing audit evidence. It raises the issue of needed revisions to the Audit Standards, whether for public or private company audits, and illustrates how certain of the current Audit Standards inhibit the external auditors' use of enhanced data analysis and continuous auditing techniques. While this whitepaper identifies a few audit standards that could be revised in light of current technological capabilities, it does not purport to address all needed revisions. Rather, it recommends that a more in-depth analysis be undertaken to develop needed guidance, as well as a list of recommended changes to the standards.

scholarly journals The Planning for the Auditing Process in the Jordanian Commercial Banks from Perspective of the External Auditors

2019 ◽  
Vol 11 (7) ◽  
pp. 40
Author(s):  
Atef Aqeel Al-Bawab
Keyword(s):  
Control Systems ◽  
Internal Control ◽  
Commercial Banks ◽  
Analytical Approach ◽  
Arithmetic Mean ◽  
T Test ◽  
Audit Process ◽  
External Auditors ◽  
External Auditor ◽  
Audit Standards

The study aimed to identify on the planning for the auditing process in the Jordanian Commercial Banks from perspective the external auditors. The researcher followed the descriptive and analytical approach to collect the data, and the researcher used the questionnaire to know the opinions of the external auditors about the idea of the study. The descriptive measures, such as the arithmetic mean, also the (T-test) were used to test the hypothesis of the study. The most important results of the study was there is planning for the audit process in the Jordanian commercial banks and the external auditor examines all aspects of the Bank's activities and banking products which provide to the clients. As recommended by the study by the need to develop an audit plan that is consistent with audit standards and audit profession in the commercial banks of Jordan and The need to expand the work of questionnaires that examine the internal control systems in the banks.

Continuous Auditing: Building Automated Auditing Capability

2002 ◽  
Vol 21 (1) ◽  
pp. 147-163 ◽  
Author(s):  
Zabihollah Rezaee ◽  
Ahmad Sharbatoghlie ◽  
Rick Elam ◽  
Peter L. McMickle
Keyword(s):  
Real Time ◽  
Financial Reporting ◽  
Future Research ◽  
Audit Process ◽  
Continuous Auditing ◽  
New Techniques ◽  
Financial Reports ◽  
Audit Data ◽  
Data Marts ◽  
Computer Based

The digital economy has significantly altered the way business is conducted and financial information is communicated. A rapidly growing number of organizations are conducting business and publishing business and financial reports online and in real-time. Real-time financial reporting is likely to necessitate continuous auditing to provide continuous assurance about the quality and credibility of the information presented. The audit process has, by necessity, evolved from a conventional manual audit to computer-based auditing and is now confronted with creating continuous electronic audits. Rapidly emerging information technology and demands for more timely communication of information to business stakeholders requires auditors to invent new ways to continuously monitor, gather, and analyze audit evidence. Continuous auditing is defined here as “a comprehensive electronic audit process that enables auditors to provide some degree of assurance on continuous information simultaneously with, or shortly after, the disclosure of the information.” This paper is based on a review of related literature, innovative continuous auditing applications, and the experiences of the authors. An approach for building continuous audit capacity is presented and audit data warehouses and data marts are described. Ever improving technology suggests that the real-time exchange of sensitive financial data will place constant pressure on auditors to update audit techniques. Most of the new techniques that will be required will involve creation of new software and audit models. Future research should focus on how continuous auditing could be constantly improved in various auditing domains including assurance, attestation, and audit services.

scholarly journals Audit Data Analysis and Application Based on Correlation Analysis Algorithm

2021 ◽  
Vol 2021 ◽  
pp. 1-11
Author(s):  
Jifan Chen ◽  
Muhammad Talha
Keyword(s):  
Data Mining ◽  
Data Analysis ◽  
Correlation Analysis ◽  
Massive Data ◽  
Data Mining Algorithm ◽  
Accounting Data ◽  
Analysis Algorithm ◽  
Audit Data ◽  
Study Results ◽  
Depth Analysis

Traditional audit data analysis algorithms have many shortcomings, such as the lack of means to mine the hidden audit clues behind the data, the difficulty of finding increasingly hidden cheating techniques caused by the electronic and networked environment, and the inability to solve the quality defects of the audited data. Correlation analysis algorithm in data mining technology is an effective means to obtain knowledge from massive data, which can complete, muffle, clean, and reduce defective data and then can analyze massive data and obtain audit trails under the guidance of expert experience or analysts. Therefore, on the basis of summarizing and analyzing previous research works, this paper expounds the research status and significance of audit data analysis and application; elaborates the development background, current status, and future challenges of correlation analysis algorithm; introduces the methods and principles of data model and its conversion and audit model construction; conducts audit data collection and cleaning; implements audit data preprocessing and its algorithm description; performs audit data analysis based on correlation analysis algorithm; analyzes the hidden node activation value and audit rule extraction in correlation analysis algorithm; proposes the application of audit data based on correlation analysis algorithm; discusses the relationship between audit data quality and audit risk; and finally compares different data mining algorithms in audit data analysis. The findings demonstrate that by analyzing association rules, the correlation analysis algorithm can determine the significance of a huge quantity of audit data and characterise the degree to which linked events would occur concurrently or sequentially in a probabilistic manner. The correlation analysis algorithm first inputs the collected audit data through preprocessing module to filter out useless data and then organizes the obtained data into a format that can be recognized by data mining algorithm and executes the correlation analysis algorithm on the sorted data; finally, the obtained hidden data is divided into normal data and suspicious data by comparing it with the pattern in the rule base. The algorithm can conduct in-depth analysis and research on the company’s accounting vouchers, account books, and a large number of financial accounting data and other data of various natures in the company’s accounting vouchers; reveal its original characteristics and internal connections; and turn it into an audit. People need more direct and useful information. The study results of this paper provide a reference for further researches on audit data analysis and application based on correlation analysis algorithm.

The AICPA Assurance Services Executive Committee Emerging Assurance Technologies Task Force: The Audit Data Standards (ADS) Initiative

2012 ◽  
Vol 26 (1) ◽  
pp. 199-205 ◽  
Author(s):  
Li Zhang ◽  
Amy R. Pawlicki ◽  
Dorothy McQuilken ◽  
William R. Titera
Keyword(s):  
Task Force ◽  
Leading Edge ◽  
Data Access ◽  
Audit Process ◽  
Process Data ◽  
Data Standards ◽  
External Auditors ◽  
Audit Data ◽  
Assurance Services ◽  
Audit Technology

ABSTRACT Data acquisition difficulties have hindered the application of advanced audit technology and audit analytics, and accentuated the challenges to meet growing audit demands. To alleviate this problem, this paper discusses the main drivers to evolve the audit process: data standards, data access, audit applications, and continuous audit. As a joint effort between the AICPA and academia, this paper provides guidance and suggestions to internal and external auditors, as well as scholars to develop knowledge for leading edge practice (Kaplan 2011).

External Auditors' Judgment and Decision Making: An Audit Process Task Analysis

2018 ◽  
Vol 17 (3) ◽  
pp. 387-426 ◽  
Author(s):  
Carolyn Mactavish ◽  
Susan McCracken ◽  
Regan N. Schmidt
Keyword(s):  
Decision Making ◽  
Task Analysis ◽  
Judgment And Decision Making ◽  
Audit Process ◽  
External Auditors

scholarly journals Assessing Management Integrity: Insights from Big 4 Auditors in Egypt

2018 ◽  
Vol 12 (1) ◽  
pp. A29-A39
Author(s):  
Rasha Kassem
Keyword(s):  
Best Practices ◽  
Training Programs ◽  
Risk Assessments ◽  
External Auditors ◽  
Corporate Scandals ◽  
Fraud Risk ◽  
Big 4 ◽  
Audit Firms ◽  
Fraud Risk Assessments ◽  
Audit Standards

SUMMARY Recent corporate scandals have raised concerns about the quality and value of the audit profession and have generated demands for improving auditors' evaluation of management integrity. The literature lacks evidence regarding methods of assessing management integrity, while audit standards provide little if any guidance on this matter. This raises questions about how external auditors can comply with the audit standards in this area and what best practices and deficiencies exist in the assessment of management integrity. This study examines methods of assessing management integrity by providing insights from the Big 4 auditors in Egypt. The findings of this study will benefit audit firms in their professional audit training programs, as well as auditors conducting fraud risk assessments.

How do IRS Resources Affect the Corporate Audit Process?

2019 ◽  
Vol 95 (2) ◽  
pp. 311-338 ◽  
Author(s):  
Michelle Nessa ◽  
Casey M Schwab ◽  
Bridget Stomberg ◽  
Erin M. Towery
Keyword(s):  
Internal Revenue Service ◽  
Strategic Game ◽  
Audit Process ◽  
Publicly Traded ◽  
Budget Cuts ◽  
Corporate Tax ◽  
Negatively Associated ◽  
Internal Revenue ◽  
Audit Data ◽  
Tax Returns

ABSTRACT This study investigates how Internal Revenue Service resources affect the IRS audit process for publicly traded corporations. Using confidential IRS audit data, we examine the effect of IRS resources on the incidence and magnitude of proposed deficiencies and settlement outcomes. We find that IRS resources are positively associated with both the likelihood and magnitude of proposed deficiencies, but negatively associated with the proportion of proposed deficiencies collected. These results are consistent with the IRS focusing on fewer positions, but targeting positions supported by weaker taxpayer facts when resources are more limited. Based on our findings, we estimate the loss in tax collections from audits of LB&I corporate tax returns alone exceeds the savings from reductions in the IRS enforcement budget. This study contributes to the literature examining the strategic game between tax authorities and corporate taxpayers and has important implications for policymakers, particularly in light of recent IRS budget cuts.

Enhancing Perceived and Actual Audit Committee Effectiveness through Financial Expert Certification

2012 ◽  
Vol 6 (2) ◽  
pp. A15-A25 ◽  
Author(s):  
Jonathan Grenier ◽  
Brian Ballou ◽  
Seth Philip
Keyword(s):  
Best Practices ◽  
Audit Committee ◽  
Potential Method ◽  
Audit Committees ◽  
Certification Program ◽  
Audit Process ◽  
External Auditors ◽  
Strong Signal ◽  
Financial Expert ◽  
Role Sharing

SUMMARY:  The purpose of this paper is to generate and inform academic, practitioner, and regulatory discussion on means to promote perceived and actual audit committee effectiveness. As one potential method, we propose that the SEC initiate a CPE-driven certification program for audit committee members designated as financial experts. Our proposal addresses many of the challenges that post-SOX audit committees face (cf. Beasley et al. 2009; Cohen et al. 2010) by emphasizing their oversight role, sharing audit committee best practices, enhancing the accountabilities of external auditors, and sending a strong signal to stakeholders that the audit committee owns the audit process.

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