Question

Discuss key aspects on how data analytics and big data (BDA) are transforming audit.

Answer 1

For decades auditors was relying on the Traditional audit methods but as we now advanced technolgy and also stakeholders are involved it required the auditors also to use the audit data analytics.

Big Data is high Amount of data coming from different sources which is growing rapidly. These data need to be analysed and processed to get important data from this high amount of data.

Data Analytics is the Process of analysing and Processing data in order to reach to meaningful conclusion which helps for decision making and to mitigate risks.

TRANSFORMING AUDIT

Audits have become self automated and auditors are using technology to computerize documentation, working papers, reports and raw data etc and it has important practice for the auditor. New data anaylsis can do comparision of last year /budgeted figures the way it was done at traditional methods, apart from that it can also do what if analysis, best and worst case scenarios, probability models, control methods and so on. Auditors can complete more work with same period which he used to do in traditional method.Audit will be more accurate and stakeholders will have confidence on the performance on the company.

By using this, Auditors can analyse large amount of data instead of using sample methods,.It gives auditors to focus more on greater audit risks and auditors can direct more than those areas.

The More advanced methods helps to identify to the trends, adnormalities ,fluctuations in a little time which helps to identify risk or fraud if any.

The audit evidence with different process can be used to Segregated based on the importance and same can be used for the further detection of risk and format formation.