Using data analytics in external audit
Auditor data analytics is about enhancing audit quality. Data analytics may be more commonly used in larger firms and the mid-tier but smaller firms need to be aware of its potential to transform smaller audits. In this Audit and Assurance Faculty guide you can find out more about developments in this area and the opportunities and challenges data analytics provides.
Data analytics is a relatively new discipline for auditors. It requires a substantial investment in hardware, software, skills and quality control.
Data analytics consists of tools that extract, validate and analyse large volumes of data, quickly. The tools are applied to complete populations, 100% of the transactions, ie, “full data sets”, and they can be used to support judgements, draw conclusions or provide direction for further investigation. Data analytics can be applied to a wide range of assurance engagements, not just audit.