Auditing poses significant challenges related to data privacy, data governance, ethics, and integrity, particularly when data is unstructured. Big data has created a drastic impact on profits, productivity, and risk management transforming the entire auditing process.
Very few firms have understood the importance of both analytics and big data to simplify their auditing process. In the recent past, significant amounts of information and content repositories of huge companies are relying on big data to share and store more information, particularly that derived from public websites, intranets, and extranets. Analytics of the data generated in this entire system can help maintain well-defined auditing systems.
It allows firms to examine large amounts of data to uncover hidden correlations, patterns, and other insights. But, only a few companies are actually capable of comprehending and harnessing the big data and its value. The actual value of Big Data analytics is easier to understand in processes like Auditing that need insightful and quality financial statements to deliver robust audits to their users. Therefore, the implementation of analytics and big data in auditing has brought in new opportunities to rethink the process of auditing.
Thanks to analytics, the new process of audit can now be expanded into more extensive testing, going beyond the earlier sample-based testing, which involved the entire population analysis of audit. It now can leverage relevant data derived using intelligent analytics, delivering a higher quality of audit results with better business insights. The involvement of such technologies in the auditing industry is still in a nascent stage and will need to evolve much more to a higher level of maturity.
In addition, audit analytics are processed using large client data sets from a closed environment up until now. This has to be transformed into an approach where companies are comfortable conducting open audit processes. However, a word of caution – the transition of this function using technology cannot be immediate. It takes a considerable leap to switch from the traditional auditing approach to the new one that entirely consistently incorporates analytics and big data. But, regardless of all the debate, experts agree that the present processes of auditing need to be transformed completely.
For the future, auditors need to involve a more massive data set along with analytics to get a clearer insight into the business operation and the critical risk areas of any business. This, indeed, will result in the creation of higher business value.
But, to achieve such a massive transformation, the entire industry needs to work closely with the critical stakeholders of the business they are supposed to audit.