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ABSTRACT: Data acquisition difficulties have hindered the application of advanced audit technology and audit analytics, and accentuated the challenges to meet growing audit demands. To alleviate this problem, this paper discusses the main drivers to evolve the audit process: data standards, data access, audit applications, and continuous audit. As a joint effort between the AICPA and academia, this paper provides guidance and suggestions to internal and external auditors, as well as scholars to develop knowledge for leading edge practice (Kaplan 2011).
Keywords: audit applications; continuous audit; data access; data acquisition; data standard.
I. INTRODUCTION
Audits are at risk of becoming less relevant if they do not change to meet investor needs and other market demands, especially for timeliness and scope (process assurance, data-level assurance, etc.). Contributing to this problem is the idea that audit standards tend to lag behind advances in technology, and many basic audit procedures have not been updated to complement these developments.
Furthermore, auditors face a challenge in accessing data as there are no standard requirements in place for data availability. Auditors do not have ready access to their clients' accounting data, even when the clients' business operations have become almost entirely digitized. As technology is the major driver of the evolution of the audit process, the AICPA Assurance Services Executive Committee (ASEC) Emerging Assurance Technologies Task Force is trying to pave the way for enhanced use of technology and advanced data analytics in the audit process. The Audit Data Standards, including data standards, data access, audit applications, and continuous audit, are formulated to facilitate data acquisition in a standardized fashion and advance the process of audit automation (Vasarhelyi et al. 2011).
This paper illustrates an effort to bridge the gap (Kaplan 2011) between accounting scholarship and practice. Kaplan (2011) argues that accounting faculty, as scholars in professional schools, have conducted studies that are mostly reactive and put overemphasis on the existing practice instead of advancing the practice. He suggests that accounting scholars should fill the void in academic research and focus on developing knowledge for leading edge practice. The emergence of data standards and audit applications (Apps) is the fruit of academic and practice cooperation.
The rest of the paper proceeds as follows. Section II describes the current challenges...