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Big data and data analytics in auditing: in search of legitimacy

Federica De Santis (Department of Economics and Management, University of Pisa, Pisa, Italy)
Giuseppe D’Onza (Department of Economics and Management, University of Pisa, Pisa, Italy)

Meditari Accountancy Research

ISSN: 2049-372X

Article publication date: 15 February 2021

Issue publication date: 21 September 2021

3073

Abstract

Purpose

This study aims to analyze the utilization of big data and data analytics (BDA) in financial auditing, focusing on the process of producing legitimacy around these techniques, the factors fostering or hindering such process and the action auditors take to legitimate BDA inside and outside the audit community.

Design/methodology/approach

The analysis bases on semi-structured interviews with partners and senior managers of Italian audit companies.

Findings

The BDA’s legitimation process is more advanced in the audit professional environment than outside the audit community. The Big Four lead the BDA-driven audit innovation process and BDA is used to complement traditional audit procedures. Outside the audit community, the digital maturity of audit clients, the lack of audit standards and the audit oversight authority’s negative view prevent the full legitimation of BDA.

Practical implications

This research highlights factors influencing the utilization of BDA to enhance audit quality. The results can, thus, be used to enhance the audit strategy and to innovate audit practices by using BDA as a source of adequate audit evidence. Audit regulators and standards setters can also use the results to revise the current auditing standards and guidance.

Originality/value

This study adds to the literature on digital transformation in auditing by analyzing the legitimation process of a new audit technique. The paper answers the call for more empirical studies on the utilization of BDA in financial auditing by analyzing the application of such techniques in an unexplored operational setting in which auditees are mainly medium-sized enterprises and family-run businesses.

Keywords

Acknowledgements

Authors are grateful to the guest editor and the two anonymous reviewers for their thoughtful comments and suggestions. They further greatly appreciate the comments of the participants at the 16th ItAIS Conference and at the EarNET Conference 2019.

Citation

De Santis, F. and D’Onza, G. (2021), "Big data and data analytics in auditing: in search of legitimacy", Meditari Accountancy Research, Vol. 29 No. 5, pp. 1088-1112. https://doi.org/10.1108/MEDAR-03-2020-0838

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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