The consultation focuses on the use of data analytics in the audit process, led by the data analytics working group. It will be used to shape future debate on amendment of International Auditing Standards (ISAs) to reflect changing IT needs and the influence of data analytics.

Any critical issues will be fed into the current work plan for the IAASB and DAWG and will be used for revisions, where appropriate, to ISAs; the review of ISA 520.

The aim is to garner views on the various applications of data analytics and the relationship to the financial statement audit. The key themes cover data acquisition and managing and interrogating large datasets, conceptual challenges when performing an audit using data analaytics, legal and regulatory challenges regarding data security and privacy, as well as jurisdiction law, as well as staff resources and expertise. This includes the effect on risk assessments, testing approaches, analytical procedures and other audit evidence.

During the comment phase, there will be outreach and events to address the use of data analytics in a financial statement audit, with a view towards issuing a formal discussion paper consultation in advance of any formal standard-setting activities.

The initial consultation provides insights into the opportunities and challenges around the use of data analytics in the audit of financial statements and outlines the insights gained from the DAWG’s activities to date. The purpose of the request for input is to:

inform stakeholders about the IAASB’s ongoing work to explore effective and appropriate use of technology, with a focus on data analytics, in the audit of financial statements; and

obtain stakeholder input and perspectives on whether all of the considerations relevant to the use of data analytics in a financial statement audit have been identified.

There is also a call for members to join a newly formed project advisory panel to further advise the IAASB and the DAWG on developments relevant to standard setting. Stakeholder input will assist the IAASB in effectively responding to these developments in the public interest, including determining whether new or revised international standards or guidance may be necessary.

The deadline for feedback is 15 February 2017.

The IAASB Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics policy paper is available here.