The Changing Nature of the Audit Profession - Opportunities and Challenges with Digital Transformation and the Use of Audit Support Systems, Big Data and Data Analytics

Abstract: This exploratory study aims to illustrate the changing nature of the audit profession by providing a comprehensive overview of the main challenges and opportunities that increasingly sophisticated audit support systems with more Big data and Data analytics capabilities induce upon the profession, and how these are addressed. The empirical findings are based on ten semi-structured interviews with eight different practitioners from the Big Four auditing firms, of which four are closely involved in the digitalisation and transformation processes at each respective firm. The key opportunities identified are how different aspects of audit support systems, Big data and Data analytics increase efficiency, enhance quality and provide more and better insights from the audit, and how this reduces information asymmetries by enhancing the auditor’s role as a monitoring mechanism. The main challenges identified are how to maintain employee support and develop the right expertise of auditors, how to ensure integrity, quality, completeness and security of data, increased competition and how to avoid technology dominance and loss of vital knowledge. Other challenges identified are how to approach the separation of audit services versus consulting services, how to cost-effectively improve the quality of the audits and the accompanying problem of an increased expectation gap and less time spent with clients. Concerning technology dominance and loss of vital knowledge, the study provides preliminary evidence that the problem where the system rather than the user takes leading control over decision-making processes might not be as severe as previous research tries to illustrate, and that practitioners perceptions in the subject matter are very much dependent on their expertise and involvement in digitalisation and transformation processes. The study also contributes by highlighting both the anticipation of relaxed audit requirements and the more segmented nature of the profession as possible key trends in the industry, consequently shaping the future audit.