Request for Input, Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics
The International Auditing and Assurance Standards Board (IAASB) released a Request for Input, Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics. The IAASB’s Data Analytics Working Group (DAWG) is furthering its work to understand how the use of technology, and more specifically data analytics, is able to enhance audit quality.
The Request for Input Paper provides insights into the opportunities and challenges with the use of data analytics in the audit of financial statements and outlines the insights gained from the DAWG’s activities to date. The purpose of the Request for Input is to:
Inform stakeholders about the IAASB’s ongoing work to explore effective and appropriate use of technology, with a focus on data analytics, in the audit of financial statements; and
Obtain stakeholder input and perspectives on whether all of the considerations relevant to the use of data analytics in a financial statement audit have been identified.
In an increasingly complex and high volume data environment, the use of technology and data analytics offers opportunities for the auditor to obtain a more effective and robust understanding of the entity and its environment, enhancing the quality of the auditor’s risk assessment and response.
ISCA takes a leading role in advocating the views and proposals of the accounting and auditing community in Singapore. ISCA would like to seek views from key stakeholders in Singapore on the above.
The comment letter incorporated views solicited from various stakeholder groups via platforms such as focus groups and public consultation. ISCA commends the IAASB's efforts in exploring the growing use of technology in audits to advocate audit quality and remain relevant to the profession. Generally, we are of the view that the IAASB has done a comprehensive analysis of the circumstances and factors that impact the use of data analytics in a financial statement audit. One key fundamental challenge is the lack of a framework to guide auditors in the application of data analytics in their audits. As the field of data analytics is still relatively new to the audit profession, the dearth of guidance to point auditors in the right direction when they encounter practical difficulties does not encourage the widespread application of data analytics. Broadly, most of the stakeholders agreed that the audit profession needs to move forward in tandem with times to embrace developments in new technologies, including data analytics, to enhance audit quality. However, they had mixed views on whether data analytics is merely an audit tool to facilitate the audit process or is it a conceptual change to the fundamental audit framework which should be integrated as part of the auditing standards.