Discussion on the impact of big data on CPA audit work

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Discussion on the impact of big data on CPA audit work

Yu Chen

Postgraduate student, Academy of Accounting,

Jiangxi University of Finance and Economics, China

Abstract

Big data, as an advanced technology, has gradually penetrated into our society from various aspects. Although there are fewer accounting firms applying big data technology in depth at present, with the further maturity of big data technology, it will gradually deepen its impact on the audit industry. Big data is the inevitable trend of information development. Big data audit is the inevitable choice for accounting firms to adapt to the development of the times. It is of great practical significance and theoretical value to study the impact of big data on CPA audit and how CPA should change its audit thinking in this era.

Key words: big data audit; audit change; CPA

Introduction

In recent years, the employment of big data has been accelerated both at the national level and in the CPA industry level. On August 31, 2015, the State Council issued the “Outline for Promoting the Development of Big Data” by Guofa No. 50. In 2016, the General Assembly of the World Audit Organization approved the establishment of the Working Group on Big Data Audit. In August 2017, the Chinese Association of Certified Public Accountants (CACPA) issued the “Planning for Informatization Construction of CPA Industry (2016-2020)”. Therefore, CPAs should keep pace with the times and policies, constantly improve the recognition and application of big data, and gradually promote the application of big data technology to the audit industry.

Big Data Audit

The traditional audit is to realize the auditing duty by checking the paper books. When the auditing profession is facing the challenge of information technology, traditional audit is facing the dilemma of “can't open accounts, fail to enter the door, not be able to count” (Chen Wei et al., 2016). Big data audit is the further development of traditional audit. Big data audit refers to auditing institutions follow the concept of big data, use big data technology methods and tools, employ large amounts of structured or unstructured data with scattered sources and diverse formats, carry out in-depth explore and analysis of cross-level, crossregion, cross-system, cross-department and crossbusiness which enhances the ability of audit to find, evaluate and analyze problems from macroscopic view. Compared with traditional audit, big data audit uses more heterogeneous data sources, more sophisticated and advanced technical methods, and has keen and profound insight into data.

The Characteristics of the Big Data Audit. Efficiency

With the increasing popularity of computerized accounting, financial software has replaced paper books as a new medium to store accounting information. At the same time, computers can handle a large number of data with high-quality and fast speed. Big data audit can significantly improve the efficiency of audit, so that auditors can devote their energy to the work that needs more professional judgment which can achieve their value.

Real-time

The application of big data audit has changed the situation of post-audit and lagging opinions in the past, and has led the audit to a continuous, dynamic and realtime direction, so that audit can play a supervisory role in the process of economic activities by timely feedback and correction of deviations.

Extensiveness

accounting big data audit

General Secretary Xi Jinping stressed that we should expand the scope and depth of audit supervision and eliminate the blind areas of supervision. In the past, due to the limitation of manpower, material resources and time, audit work was mostly random check to find doubtful points from a small part of the data. Nowadays, the massive storage of computers and the efficient processing of data make the full coverage of crossannual, cross-field and cross-professional auditing possible, which helps to better play the important role of audit in capital market supervision.

Analysis on the Impact of Big Data on CPA Audit Work

The essence of big data lies in the transformation of people's thinking when they collect, process and use data; the innovation of big data lies in the fundamental change of people's working methods; the necessity of big data application lies in its ability to promote work efficiency; and the gradual integration of big data technology and industry forces people to constantly improve their comprehensive ability.

Promoting the Change of CPA Auditing Thinking

The era of big data has not only changed the traditional methods of data collection, processing and application, but also promoted the change of people's way of thinking (Qin Rongsheng, 2014). These changes will transform the technology and methods of understanding and studying social and economic phenomena. CPA is required to quit from the traditional audit thinking mode and use big data audit thinking to guide audit work.

Promoting the change of CPA audit thinking is embodied in two aspects. In the acquisition of audit evidence, the emphasis has shifted from causality between data to correlation. In the aspect of audit cost- benefit, it breaks the limit of audit cost-benefit thinking. The core of data processing is to discover valuable things from the complex data. When this process is greatly shortened, audit can be accomplished with high quality at a lower cost like products.

Promoting the Innovation of CPA Auditing Method

Big data technology promotes the transformation of CPA audit method from sampling audit to comprehensive audit. The era of big data no longer relies on sampling and analysis, but on the realization of a full data model (Victor Mike Schoenberg, 2013). Under the traditional audit mode, due to the constraints of audit cost-effectiveness and audit efficiency, certified public accountants focus on structured financial data in their audit work. It is difficult to verify all the information of the audited units. Sample auditing method can only be used to infer the total from the selected samples in order to support the audit opinions issued. However, due to the uncertainty of sample auditing, it undoubtedly increases the auditing risk of CPAs to a certain extent.

Although we audit data mainly based on structured data, the value of unstructured documents, Internet pages and social data to audit is beyond doubt. Even with the development of the Internet of Things industry in China, sensor data will also become the source of audit data (Liu Xing, 2016). Certified public accountants can use big data and other related technologies to select the overall audit mode, collect all data related to the audited object across industries and enterprises, construct the overall audit thinking mode, timely audit the auditees, eliminate the imbalance of audit tasks, avoid the risk of audit sampling, and carry out the audit work from multiple perspectives of systematic thinking, therefore effectively control the audit risk.

Promoting CPA Audit Efficiency

The emergence of big data has greatly improved the auditing efficiency of CPAs. For example, the auditing standards stipulate that the general audit working papers need to be well preserved, and a large number of working papers will be formed in the audit work. The preservation of manuscripts will take up a huge amount of audit resources. If firms use cloud computing and big data to audit, they can greatly reduce the preservation of paperwork audit manuscripts, thereby improving audit efficiency. At the same time, cloud platform stores massive data, which is relatively easy to implement when comparing financial and non- financial data of audit units with industry and budget, that is, the time of executing analysis procedures is greatly reduced, and the efficiency is greatly improved.

Promoting the CPA Comprehensive Skills

The precondition for CPAs to make full use of big data audit technology is to master the relevant tools of big data. At present, although most CPAs are skilled in the field of financial audit, they know little about big data technology. This is obviously difficult to meet the needs of the rapid development of society for big data auditing.

In the era of big data, compound talents are needed. This is not only a challenge for CPAs, but also an opportunity to achieve leapfrog development of audit services. Big data audit has incomparable advantages compared with traditional audit, but it also has a higher threshold. Big data promotes the improvement of CPA's comprehensive skills. CPAs should cultivate their ability of collecting, analyzing and discovering big data, actively learn big data, cloud computing and other related technologies, combine audit content with big data technology, and enhance the application ability of big data related technologies.

Conclusion

The big data era supported by new technologies such as cloud computing and artificial intelligence is the social environment that the independent auditing industry must face in the future. Under this background, the auditing thinking of CPAs will change, the auditing methods will be innovated, the auditing efficiency will be improved, and the comprehensive quality of CPAs will also be developed. Big data makes CPA audit risk lower and the quality of audit work and results improved. However, at the same time, the CPA industry is facing more severe challenges in personnel quality, technology and information security. How to adapt to the audit work in the era of big data has become a problem that CPA industry must consider.

References

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4. Qin Rongsheng. Research on the Impact of Big Data and Cloud Computing Technology on Audit[J].Auditing Research, 2014(06):23-28.

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