The New Challenge to Auditors in the Era of Big Data —Case Study for KPMG Taiwan

In past decades, there were several significant changes in the development of audit practice. Auditors who used to manually examine traditional paper accounting records, supporting documents and voucher are now able to adopt personal computer devices and assisting auditing software into audit procedure while the business has applied accounting software or ERP system to process the accounting records electronically. This change not only increases the audit efficiency, but also enhances the audit effectiveness. With the development and progress of information technology, people are now living in the era of Big Data, in which speed of data generation is rising, the absolute quantity of data processed is soaring and the diversification of data is flowing to a level like never before. This research mainly explores how the auditors should change to secure the audit quality, to further enhance the confidence from stakeholders, and to raise the value of auditors’ report in the new environment of Big Data. As a case-study type research interviewing several key persons in KPMG in Taiwan, the study mainly figures out how the auditors in large accounting firm adopt the Data Analytics (D&A) technique to assist their audit works under the environment of Big Data. In addition, it also explores what challenges the auditors are facing when using of such new technique, including the change in the tools used and the mindset as well as the change in possible alternative ways of response. This research is based on interviews with five characters of professional, including the head of audit practice, the head of professional knowledge development, audit partner, the head of computer audit practice, and computer audit specialist, to understand their expectation, concerns and potential obstacles in adoption of D&A technique assisting audit works now and future. The conclusion of this research shows that accounting firm adopts D&A in audit in order to respond to the change of technology and the trend of D&A development. Currently, the accounting firm is technically backed up by its member firms oversea. The expected benefits from applying D&A in audit are enhancing audit effectiveness and reducing audit risk. Furthermore, the client’s management system optimization can be provided as value added services and therefore secure the relationship with the client. However in practice, the difficulties encountered when applying new methodology include the limitation of the current regulations, the recruitment of multi-skills talent, and the concern of client information security. In the future, accounting firm is suggested to respond to the change of auditing environment deliberately, to train the new generation of auditors with cross-sectors knowledge as soon as possible, to follow closely to the trend, and to cooperate with the authorities and the rule setting organizations to set up proper relevant regulations.