Transformacja cyfrowa procesu badania sprawozdań finansowych

The chapter demonstrates the digital transformation process in financial audit. Digitization improves the audit quality and increases the added value for stakeholders. The use of information is more efficient and auditors could focus on significant risks. The use of new technologies in the audit of financial statements helps to obtain more relevant audit evidence.

Recommendations for Auditing Inventory of Construction Industry Organizations

Auditing stocks of construction materials is a time-consuming and complex process to obtain audit evidence. The article provides recommendations for conducting separate audit procedures that will avoid errors in verification.

Wealthy Watches Inc.: The Substantive Testing of Accounts Receivable in the Evolving Audit Environment

Substantive testing of accounts receivable through confirmations is an established and required audit procedure. However, the technology used to perform portions of this work is evolving. This case exposes students to the testing of accounts receivable while introducing them to audit-related technologies (such as Interactive Data Extraction and Analysis (IDEA) software and robotic process automation (RPA)) used in practice. In this case, students 1) evaluate a client-provided data file, 2) select a sample of customer invoices using IDEA, 3) obtain audit evidence from their firm’s RPA software and evaluate the evidence for the identification of exceptions, 4) project any misstatements from the sample to the population, and 5) document their conclusions. This case helps students develop a greater awareness of technologies used in audit practice. The case also allows students to practice skepticism, apply professional judgment, and hone their business writing skills by documenting their results in a professional memo.

The Effect of Competence, Independence, Accountability, and Audit Evidence on Audit Quality

This study aims to determine the effect of competence, independence, accountability, and audit evidence on audit quality. The sample used in this study were auditors who work at the Public Accounting Firm in Bandung and obtained 36 auditors as respondents. The data source used is primary data obtained by distributing questionnaires. This study uses a non-probability sampling method with purposive sampling technique and multiple linear regression analysis methods using the Statistical Program for Society Science (SPSS) software. Based on the research result, it can be concluded that the variable competence, independence, accountability, and audit evidence partially affects audit quality.

Enhancing Auditors’ Reliance on Data Analytics under Inspection Risk Using Fixed and Growth Mindsets

Audit firms have invested significantly in data analytics (DA). However, evidence shows that auditors are often reluctant to rely on DA. A major auditor concern is that inspectors will second-guess the audit evidence gathered using DA. Drawing on psychology research, we examine how the effect of inspection risk on auditors’ reliance on DA is moderated by a fixed mindset (a belief that one’s ability is fixed) versus a growth mindset (a belief that one’s ability is malleable). In an experiment with Big Four auditors as participants, we find that, relative to low inspection risk, high inspection risk reduces auditors’ reliance on DA when auditors are prompted with a fixed mindset, but increases it when auditors are prompted with a growth mindset. Our findings contribute to auditing literature on DA, inspection risk, and mindsets, and have implications for auditors, audit firms, and regulators.

Basics of SQL for Audit Data Retrieval and Analysis

The purpose of this teaching note is to explain how Structured Query Language (SQL) queries can help auditors to independently retrieve properly formatted data as audit evidence or for further analyses. The note demonstrates data extraction using Microsoft (MS) Access, one of the simplest SQL compliant database software applications. We use a dataset fragment extracted from the publicly available enterprise datasets provided by Walton College (University of Arkansas) to run SQL queries as a part of audit investigations. Data extraction is the first step of Extract, Transform, and Load (ETL) and may be time-consuming. We demonstrate how SQL queries can assist with this task, thereby allowing the auditor to begin analysis sooner. This teaching note can be used to prepare future auditors for the emerging data-rich and technology-driven business environment.

Do Tax Professionals Act Like Auditors when Evaluating Tax-Related Audit Evidence?

The audit of the financial statement income tax accounts is ultimately the responsibility of the audit engagement team; however, tax professionals are often involved because of their knowledge of the tax functional area. Auditors are expected to exercise professional skepticism and independence when performing audits, while tax professionals are expected to be advocates for their tax clients. This study investigates whether the auditor and/or tax professionals’ typical role influences how they evaluate evidence on an audit engagement, especially when provided evidence by individuals with whom they are closely affiliated. The results of an experiment with experienced auditors and tax professionals, suggest that despite differing in their trait skepticism and client advocacy attitudes, tax professionals and auditors make similar judgments when in the role of an audit engagement team member. We also find evidence both auditors and tax professionals are more persuaded by individuals with whom they have a closer affiliation.