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Gurbachan Singh, Mangehna Kaur (2021) The impact of big data analytics on financial statement auditing: an exploratory study. [Dissertation (University of Nottingham only)]

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Abstract

The audit industry has been largely affected by the evolvement of technology over the years and accordingly, it has imposed challenges on audit firms and auditors. Several studies investigated the impact of information technology (IT), in terms of the extent of which the IT audit techniques have been used, but very few studies are available based on the transition from conventional audit to technology based audit in developing countries. This study focusses on exploring the impact of implementing Big Data Analytics (BDA) in the Big- Five audit firms in Malaysia – a developing country. There are three objectives of this study. (1) To investigate the changes from traditional auditing to auditing with the presence of BDA. (2) To determine the primary challenges auditors and audit firms face when implementing and sustaining the use of BDA in their respective audit firms. (3) To analyze how is BDA helping auditors provide better quality audit.

Drawing on semi structured interviews from auditors with extensive experience using Data Analytics in Financial Statement Auditing across the Big-Five firms in Malaysia this study provides a holistic overview from traditional auditing to auditing with the presence of BDA. The primary challenges faced by the external auditors and audit firms in Malaysia when implementing and sustaining the use of BDA in the audit industry will also be looked into.

This study presents a few key findings firstly, we can conclude that using DA tools could potentially decrease timings of audits as auditors become more familiarized with the tools. Conversely, we predict cost of audit will either remain constant or increase over time due to a constantly evolving business environment. Secondly, auditors in Malaysia are not entirely aware of the potential and benefits of continuous auditing may provide. Thirdly, auditors use analytics to gain more insights by examining all transactions of client’s businesses hence, BDA might be a solution for audit firms to increase audit quality. Fourthly, using data analytics in audit engagement does affect skills sets and competence of auditors.

As Malaysia has hit the second wave of the ongoing worldwide Covid-19 pandemic, organizations are left with no choice but to move into a digitalized and tech-savvy environment to ensure audits are done effectively and efficiently. Hence, this research covers an essential aspect on the Covid-19 pandemic affecting audit work, employee morale and cost of audit.

Item Type:	Dissertation (University of Nottingham only)
Depositing User:	Gurbachan Singh, Mangehna
Date Deposited:	04 Aug 2021 02:24
Last Modified:	04 Aug 2021 02:24
URI:	https://eprints.nottingham.ac.uk/id/eprint/63533

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