MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM Ho Chi Minh University of Banking DUONG THUY HANG APPLYING AUDIT DATA ANALYTICS IN FINANCIAL STATEMENT AUDIT A CASE STUDY AT AASC GRADUATION TH[.]
MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM Ho Chi Minh University of Banking DUONG THUY HANG APPLYING AUDIT DATA ANALYTICS IN FINANCIAL STATEMENT AUDIT: A CASE STUDY AT AASC GRADUATION THESIS MAJOR IN ACCOUNTING CODE: 7340301 Ho Chi Minh City, 2022 MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM Ho Chi Minh University of Banking DUONG THUY HANG APPLYING AUDIT DATA ANALYTICS IN FINANCIAL STATEMENT AUDIT: A CASE STUDY AT AASC GRADUATION THESIS MAJOR IN ACCOUNTING CODE: 7340301 SUPERVISOR DANG DINH TAN (PhD) Ho Chi Minh City, 2022 i ABSTRACT Big Data (BD) and Data Analytics (DA) are hot topics in many fields today Enterprises with strong development strategies such as economic groups and large companies are interested in implementing and applying them to their operation processes, and the audit field is no exception However, to apply them in practice, it is necessary to carefully consider and calculate the potential positives and negatives of BD and DA In the article, the author summarizes some key features of the application of data analysis and big data in auditing financial statements, and points out the benefits and challenges for business auditing when applicable Thereby, the author discusses solutions to reduce challenges when applying DA and BD for auditing firms in modern financial statement audits Keywords: Audit data analytics, data analysis, financial statement audit ii DECLARATION OF AUTHENTICITY I declare that all materials presented hereinafter are my own work based on my best knowledge during university and with the support of my supervisor Dang Dinh Tan (PhD) This thesis is guaranteed to be free from plagiarism, in which any cites or quotes are fully acknowledged in the references At any time, I am responsible for my works if it is shown that I have violated this declaration of authenticity Ho Chi Minh City, June 2022 Duong Thuy Hang iii ACKNOWLEDGEMENTS First and foremost, I would like to thank my supervisor, Dang Dinh Tan (PhD), for his excellent direction, assistance, and attention to this thesis This would not have been possible without his unending encouragement and support Second, I would like to express my heartfelt gratitude to all instructors at Banking University of Ho Chi Minh City for their tremendous efforts in giving me a solid foundation of knowledge in both academic and professional life Last but not least, I would like to express my heartfelt gratitude to my loving family and friends for their unending patience, support, and faith in me that has enabled me to reach this point This would not have been feasible without their constant encouragement Ho Chi Minh City, June 2022 Duong Thuy Hang iv TABLE OF CONTENTS ABSTRACT i DECLARATION OF AUTHENTICITY ii ACKNOWLEDGEMENTS iii TABLE OF CONTENTS iv LIS OF ABBREVIATIONS vii LIST OF TABLES AND FIGURES viii CHAPTER 1: INTRODUCTION 1.1 The necessity of the topic 1.2 General, specific objectives and research questions 1.3 Research objects and research scopes 1.4 The research methodology 1.5 Contribution of the research 1.6 Structure of the thesis CONCLUSION OF CHAPTER CHAPTER 2: PRIOR STUDIES ON THE APPLICATION OF AUDIT ANALYTICS 2.1 Foreign 2.2 Domestic 11 CONCLUSION OF CHAPTER 14 CHAPTER 3: THEORETICAL PERSPECTIVES 15 3.1 Related concepts 15 3.1.1 Concept of audit data analytics .15 v 3.1.2 Purpose of audit data analytics 18 3.1.3 Auditor‟s approach to developing specific data analysis tools .20 3.1.4 Reliability of audit data analytics 20 3.1.5 Risks associated with the application of audit data analytics .21 3.2 Applying audit data analytics in financial statement audit .22 3.2.1 Applying audit data analytics in the audit planning phase 22 3.2.2 Applying audit data analytics in the audit implementation phase 24 3.2.3 Applying audit data analytics in the audit reporting phase 27 CONCLUSION OF CHAPTER 28 CHAPTER 4: RESULTS AND DISCUSSIONS 29 4.1 Apply some new audit analytics techniques to two client cases of this audit firm accrual 2021 29 4.2 Interviewing results on the advantages, opportunities and challenges of applying those new audit analytics techniques in the context of the audit firm39 4.2.1 The advantages 39 4.2.2 The opportunities and challenges 41 CONCLUSION OF CHAPTER 44 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 45 5.1 Conclusion 45 5.1.1 Advantages 45 5.1.2 Challenges .47 5.2 Recommendations .50 5.2.1 Training on data analytics skills for audit staff .50 vi 5.2.2 Support for auditing firms to apply big data and data analytics in professional practice 51 5.2.3 Auditing firms need to consider carefully before investing in big data and data analytics 52 REFERENCE 54 APPENDIX A: The process of implementing a typical contract at AASC Auditing Firm 58 APPENDIX B: Illustrative Data of Company A for the year 2021 64 APPENDIX C: Illustrative Data of Company B for the year 2021 69 vii LIS OF ABBREVIATIONS Abbreviations Full meaning ADA Audit data analytics BD Big data CPS Cyber Physical Systems DA Data analytics Deloitte Deloitte Touche Tohmatsu ERP Enterprise resource planning EY Ernst & Young FAO Fast Accounting Offline FPT Financing Promoting Technology GL General ledger HDP Hortonworks Data Platform IoT Internet of Things IT Information technology KPMG Klynveld Peat Marwick Geordeler NFD Non-financial data PwC PricewaterhouseCoopers TP Bank Tien Phong Bank VACPA Vietnam Association of Certified Public Accountants viii LIST OF TABLES AND FIGURES Figure 1: PwC‟s „Halo for Journals‟ 18 Figure 2: Ending G/L account balances as of 2021 compared to 2020 (in million VND) 32 Figure 3: Changes in ending G/L account balances as of 2021 compared to 2020 (%) 33 Figure 4: Monthly Debit amount of A/R in 2020, 2021 (in million VND) .34 Figure 5: Monthly transactions in 2020, 2021 36 Figure 6: Monthly total amount of transactions in 2020, 2021 (in million VND) 36 Figure 7: Outliers of transaction amounts by month in 2021 37 Figure 8: Number of transactions by week day and month in 2021 39 Table 1: The Balance sheet of company A between 2020 and 2021 .32 Table 2: Ten largest transactions in July 2021 of Company B 38 ... Risks associated with the application of audit data analytics .21 3.2 Applying audit data analytics in financial statement audit .22 3.2.1 Applying audit data analytics in the audit planning phase... reduce challenges when applying DA and BD for auditing firms in modern financial statement audits Keywords: Audit data analytics, data analysis, financial statement audit ii DECLARATION OF AUTHENTICITY...MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM Ho Chi Minh University of Banking DUONG THUY HANG APPLYING AUDIT DATA ANALYTICS IN FINANCIAL STATEMENT AUDIT: A CASE STUDY AT AASC GRADUATION