Opportunities and Challenges for Process Mining in Financial Audits

• In Event: Modeling and Design Science

Abstract

The financial year-end audit is a complex and highly specialized process. The digitalization of the economy and the increasing automation of transaction processing creates new challenges for auditors. Traditional audit procedures become inefficient and ineffective if increasingly large amounts of financially relevant transactions are processed by computer systems. This study investigates the opportunities for the application of process mining for financial audits and discusses important limitations with a focus on its integration into the overall audit process. Process mining is a data analytics technique which can be used to create reliable process models effectively and efficiently. The application of process mining has the potential to significantly improve process audits and therefore contribute to more reliable financial reports. This study is exploratory in nature. The presented results were derived by following a design science research approach. The used mining algorithm was implemented in a software proto-type. A demonstration example is included for evaluation purposes and to illustrate the applicability of the presented concepts.

Author

• Michael Werner, Auckland University of Technology