Changes in Use of Data and Technology in the Conduct of Audits

June, 5, 2019

Published: PCAOB

Advancements in technology are affecting the nature, timing, preparation, and use of financial information. Auditors are expanding their use of data analytics and emerging technology-based tools to plan and perform audits. Innovations in these technologies have the potential to improve the efficiency and effectiveness of both the audit and the financial reporting process. Further, the increased use of these technologies could affect, among other things, the nature and extent of information available to auditors, how an audit is performed, and audit firms’ quality control systems. 

In assessing whether there is a need for guidance, changes to PCAOB standards, or other regulatory actions, the staff’s considerations include: observations from the Board’s oversight activities, changes to audit firms’ methodologies, academic research, outreach with stakeholders, and the activities of others, including standard setters and regulators. In addition, the staff’s activities are informed by the Board’s Data and Technology Task Force, whose members provide to the staff insights into the use of data analytics and emerging technologies by auditors and preparers.

The staff’s activities to date have primarily focused on understanding the use of data analytics and emerging technology-based tools by auditors to identify and assess risks of material misstatement. The next steps are focused on the following:

– Assessing changes in the staff’s previous observations about the use of technology in auditing;

– Understanding how data analytics and emerging technology-based tools are used by auditors to respond to identified risks of material misstatement;

– Obtaining a deeper understanding of the use of technology in the accounting and financial reporting process;

– Continuing to assess how changes in the current use of existing, or new emerging technologies could affect the auditing profession; and

– Continuing to analyze PCAOB standards to determine whether rulemaking or guidance is necessary.


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