The Expected Effect ISA 500 (Revised) will have on the Current Problems Associated with the Use of Data Analytics

Anders Schjønning Lie

Student thesis: Master thesis

Abstract

The purpose of this thesis is to examine the expected effect ISA 500 (Revised) will have on the current problems associated with the use of data analytics. To achieve this aim the thesis will examine what the current problems are associated with the use of data analytics, what IAASB’s desired effect with ISA 500 (Revised) are and what impact that will have in relation to the current problems. Lastly the thesis will examine what effect the expected results of ISA 500 (Revised) will have on the current problems associated with the use of data analytic. The study is based on publicly available data from two IAASB’s projects. Respectively Technology and Audit evidence. The findings of this thesis are that there are 38 current problems associated with the use of data analytics. These problems can be sorted in to nine general categories: 1. Updating/modernising terms, descriptions and requirements. 2. Documentation requirements. 3. The work effort when using data analytics. 4. Quality control of third party developed tools. 5. Assessment of the relevance and reliability of information. 6. Lack of reference in the ISAs coupled with professional scepticism. 7. The location of audit procedures and audit evidence in the current model (risk identification and response to identified risk). 8. Bias. 9. Definition problems. IAASB’s desired effect with ISA 500 (Revsed) ranges from clarifying the purpose of ISA 500 to modernising the standard through a principle-based approach. To achieve the desired effect the IAASB will address a range of questions. On the basis of these questions, it is concluded that the project of ISA 500 (Revised) will impact the current problems by: - Fully addressing the problems related to categories 5, 6 and 7. - Addressing the problem related to ISA 500 under category 1. - Partly addressing the problems related to category 9. - Addressing most of the problems related to categories 3 and 8. Through the analysis it is determined that the project so far has produced 13 expected results. These expected results impact the current problems by: - Fully addressing the problems related to categories 5, 6 and 8. - Addressing the problem related to ISA 500 under category 1. - Partly addressing the problems related to category 3. - Addressing most of the problems related to categories 7 and 9.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2022
Number of pages106
SupervisorsKim Klarskov Jeppesen