An exploratory study in South Africa: Big Data and auditing

Abstract

This study explores the latest development in audit technology: the adoption of Big Data in a South African context. It addresses three themes: whether there is a responsibility to incorporate Big Data when auditing financial statements under current auditing standards and if so, in what ways should Big Data be incorporated to evidence compliance with these standards. If not, under what circumstances such a responsibility may exist. Individual semi-structured interviews were conducted with 20participants. The individuals interviewed, among them external auditors, audit academics, and employees of audit regulators and professional bodies, have practical experience and demonstrable knowledge of the current auditing standards. A conventional content analysis was used to identify core themes in the interview and recommend areas for further research. Participants unanimously agree that there is an implied responsibility to enhance their digital acumen to meet the ethical requirements of an audit. Most of the participants suggest that risk assessment procedures should include data analytics, auditors should verify the reliability of client data and that the inclusion of Big Data in an audit depends on clients’ specific circumstances. This study is one of the first empirical accounts to provide a South African perspective on Big Data in auditing and to consider Big Data within the context of current auditing standards