To maintain public confidence in the financial system, it is essential that most financial fraud is prevented and that incidents of fraud are detected and punished. The responsibility of uncovering creatively implemented fraud is placed, in a large part, on auditors. Recent advancements in technology are helping auditors turn the tide against fraudsters. Big Data, made possible by the proliferation, widespread availability and amalgamation of diverse digital data sets, has become an important driver of technological change. Big Data analytics are already transforming the traditional audit. Sampling and testing a limited number of random samples has turned into a much more comprehensive audit that analyzes the entire population of transactions within an account, allowing auditors to flag and investigate all sorts of potentially fraudulent anomalies that were previously invisible. Artificial intelligence (AI) programs, typified by IBM’s Watson, can mimic the thought processes of the human mind and will soon be adopted by the auditing profession. Machine learning (ML) programs, with the ability to change when exposed to new data, are developing rapidly and may take over many of the decision-making functions currently performed by auditors. The SEC has already implemented pioneering fraud-detection software based on AI and ML programs. The evolution of the auditor’s role has already begun. Current accounting students must understand the traditional auditing skillset will not longer be sufficient. While facing a future with fewer auditing positions available due to increased automation, auditors will need training for roles that will be more data analytical and computer-science based.
| Identifer | oai:union.ndltd.org:CLAREMONT/oai:scholarship.claremont.edu:cmc_theses-2685 |
| Date | 01 January 2017 |
| Creators | Evett, Chantal |
| Publisher | Scholarship @ Claremont |
| Source Sets | Claremont Colleges |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | CMC Senior Theses |
| Rights | © 2017 Chantal O. Evett |
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