The transformation to data analytics in Big-Four financial audit: what, why and how?

Angela Liew, Peter Boxall and Denny Setiawan

Pacific Accounting Review, 2022, vol. 34, issue 4, 569-584

Abstract: Purpose - This study aims to explore the implementation of data analytics in the Big-Four accounting firms, including the extent to which a digital transformation is changing the work of financial auditors, why it is doing so and how these firms are managing the transformation process. Design/methodology/approach - The authors conducted 23 interviews with 20 participants across four hierarchical levels from three of the Big-Four accounting firms in New Zealand. Findings - The firms have entered the era of “smart audit systems”, in which auditors provide deep business insights that are communicated more effectively through data visualisation. The full potential, however, of data analytics depends not only on the transformation process within accounting firms but also on improvement in the quality of IT systems in client companies. The appointment of transformation managers, the recruitment of technology-savvy graduates and the provision of extensive training are helping to embed data analytics in the Big-Four firms. Accounting graduates in financial audit now need to show that they have the aptitude to become “citizen data scientists”. Practical implications - The findings explain how data analytics is being embraced in the Big-Four auditing firms and underline the implications for those who work in them. Originality/value - The findings challenge the “technological reluctance” thesis. In contrast, the authors observe a climate of positive attitudes towards new technology and accompanying actions in the Big-Four firms. The authors show how branches of the Big-Four firms operating distantly from their global headquarters, and with smaller economies of scale, are implementing the new technologies that characterise their global firms.

Keywords: Audit; Audit analytics; Audit revolution; Big data; Data analytics; Smart audit systems (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:parpps:par-06-2021-0105

DOI: 10.1108/PAR-06-2021-0105

Access Statistics for this article

Pacific Accounting Review is currently edited by Professor Tom Scott, Dr Pei-Chi Kelly Hsiao, Associate Professor Chelsea Liu, Associate Professor Sophia Su, Associate Professor Thu Phuong Truong and Dr Lily Chen

More articles in Pacific Accounting Review from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().