Technological Impact on Audit Functions: Analysis of Big Four Firms

AUDIT AND ASSURANCE 1
With the increased developments in the technological innovations in the fields of
artificial intelligence (AI), data analytics and block chain technologies, the auditing functions
have significantly enhanced over the years (Issa, Sun and Vasarhelyi, 2016). There are clear
benefits of the impacts on technology and professional bodies and regulators are increasingly
relying on the various tools and techniques for carrying out the audit functions. The following
work is aimed at analysing the various aspects of the technological impact on the audit as
used by the big four firms across various audit functions.
The big four firms namely Deloitte, EY, PricewaterhouseCoopers (PwC) and KPMG
are the biggest service providers in the auditing and accounting industry having various
branches and subsidiaries across the globe. One of the major attributes of the services of these
large scale service providers is the large amount of data that needs to compile to be assessed,
which leads these entities to continuously embrace innovations (Raphael, 2017). For instance,
KPMG has partnered with IBM in the year 2016, in the adoption of the cognitive techniques
towards attaining audit assurance (KPMG, 2019). One of the key terms that has become the
buzzword in the industry is the ‘Know Your Data’ (KYD). The term has gained more
significance over the ‘Know Your Client’ (KYC) in recent years in the finance and
accounting profession. In addition, the development in cloud computing and cloud storage
have further opened up the possibilities of collecting and analysing data on a previously
unimaginable scale. The said technologies allows the auditors to collect and analyse broader
industry data sets that were previously beyond the reach. The artificial intelligence usage
signifies algorithms learning how to do things such as statistical analysis of large amounts of
data, classify the same and predict values of the same. Block chain is foundational concept in
the way the data is stored. It refers to a complex system of consensus and verification to
generate a single agreed upon permanent record (Dai and Vasarhelyi, 2017). Thus, it is a
method of ‘universal entry bookkeeping where there is sharing of the data with the
participants.
Some of the positive impacts of the use of the technology in the auditing functions are
elaborated as follows. The technology leads to enhanced efficiency by facilitation of the audit
fieldwork by the automation of the time-consuming manual and clerical tasks (Salijeni,
Samsonova-Taddei and Turley, 2019). An instance of the technology usage is the interface
creation between the audit client’s systems to facilitate the automatic transfer of the compile
data. Another major impact is in the form of the improved testing to gain deeper insight into
the company’s operations. This further enables the timely and better analysis of the clients’