Analytics in External Auditing: A Literature Review

• In Event: SET Dialogue

Abstract

There is an increasing recognition in the public audit profession that the emergence of big data (Vasarhelyi, Kogan, and Tuttle 2015) as well as the growing use of analytics by audit clients has brought new concerns. That is, should more complex analytics be used in the engagement and if so, where? Which techniques appear to be most promising? The regulations provide minimal guidance. This paper proposes that these questions may be answered with an examination of extant external audit research. At least 300 papers have been discovered that discuss the use of analytical procedures in the public audit engagement. These papers are then categorized by technique, engagement phase, and other attributes for analysis. This analysis of the literature is classified as an External Audit Analytics (EAA) framework, which is subsequently expanded in the third chapter with the concepts of business analytics (Holsapple et al, 2014). Specifically, the audit research community appears to have already discussed the current concerns of the profession.

Authors

• Deniz A Appelbaum, Rutgers University - Newark

• Alexander Kogan, Rutgers University - Newark

• Miklos A Vasarhelyi, Rutgers University - Newark