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PCAOB Standing Advisory Group Meeting - Use of data and technology in audits

  • PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

May 31, 2017

At the May 2017 Standing Advisory Group (“SAG") meeting, SAG members discussed the use of data and technology in audits and the potential implications for PCAOB auditing standards.

Companies are investing significantly in technology and data analytics for use in such areas as marketing, operations, financial reporting, and internal audit.

PCAOB staff has gathered information from a range of sources that indicate the following areas where changes in the use of data and technology are affecting or are expected to affect audit approaches:

  • Evaluating the three-way-match between purchase orders, delivery confirmation, and invoices;
  • Using cognitive technology to compare recorded revenue to contract terms to help auditors assess the appropriateness of revenue recognition;
  • Gathering external public data to evaluate financial statement risks and comparing company data with external data
  • Analyzing structured and unstructured data to identify trends to assess fair value;
  • Manipulating data to assess the impact of different assumptions (i.e., stress testing);
  • Automating testing of investment companies’ transactions through direct data feeds from the companies’ service providers;
  • Using trend and regression analyses to identify risks; and
  • Developing predictive models to assess the future financial viability of a company and assess the risk of fraud.

Review the meeting highlights on the PCOAB's website.

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