The Data Analytics Transformation: Evidence from Auditors, CFOs, and Standard-Setters

• In Event: Big Data and Technology Issues

Abstract

Data analytics is transforming our global markets. Spending on analytics is expected to
grow approximately 70% by 2020. We investigate the use of data analytics throughout
the financial reporting process by companies, external auditors, and standard-setters. We
use interviews to examine how these groups use data analytics and how its use affects
their interactions. We find companies and their auditors have introduced data analytics
and report benefits to financial reporting and audit quality. However, challenges exist
related to the lack of standards, obtaining the right skillset, financial investment, and
capturing accurate data. While our interviewees believe that analytics has strengthened
the client-auditor relationship, we identify potential future conflicts with the audit fee
model and auditor independence. Using socio-technical theory to interpret our results, we
find that data analytics will likely continue to change companies’ and auditors’ practices.
However, lack of regulatory guidance and implementation costs present considerable
hindrances to diffusion.

Authors

• Ashley Austin, University of Richmond

• Tina Carpenter, The University of Georgia

• Margaret H Christ, University of Georgia

• Christine Marie Nielson, University of Georgia