The Impact of Big Data Analytics on Audit Quality in the Digital Era
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Abstract
This study aims to examine the impact of Big Data Analytics on Audit Quality using the Structural Equation Modeling-Partial Least Squares (SEM-PLS) approach. The research involved 120 respondents consisting of auditors from Big Ten public accounting firms in Indonesia. The Big Data Analytics variable was measured based on five main dimensions: volume, velocity, variety, veracity, and value. The results indicate that Big Data Analytics has a positive and significant effect on Audit Quality. This relationship is demonstrated by a path coefficient in the moderate category, with a significance level below the five percent threshold. The coefficient of determination shows that nearly half of the variation in Audit Quality can be explained by Big Data Analytics. These findings confirm that effective implementation of Big Data Analytics can enhance the effectiveness, efficiency, and reliability of the audit process. The study also supports the application of the Technology Acceptance Model framework, where perceived usefulness and ease of use of technology contribute to improved audit quality. The practical implications of this research highlight the importance of data-driven strategies in enhancing audit quality in today's digital era.
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References
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https://doi.org/10.22495/cgobrv6i1p5
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https://doi.org/10.2308/ajpt-51684
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https://doi.org/10.2308/ajpt-10445
Cao, L., Chychyla, R., & Funk, J. (2015). Big Data and analytics in accounting: A review and opportunities. Journal of Information Systems, 29(4), 1–18. https://doi.org/10.2308/isys-51023
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https://doi.org/10.1108/MAJ-01-2018-1773
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https://doi.org/10.1108/AJAR 04 2022 0114
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https://doi.org/10.1016/0165-4101(81)90002-1
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Huy, N. T., & Hung, N. T. (2022). The impact of Big Data Analytics on audit quality in Vietnamese public accounting firms. Journal of Accounting and Finance, 22(1), 50–65.
Kend, M., & Nguyen, H. (2020). The impact of Big Data Analytics on audit quality: Evidence from Big Four firms. Accounting & Finance Research, 9(3), 45–58. https://doi.org/10.5430/afr.v9n3p45
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https://doi.org/10.1016/j.eswa.2011.02.021
Rounaq, Z. K., Zamil, A. R., & Sathi, Z. J. (2023). Impact of Big Data Analytics on audit quality: Evidence from Bangladesh. Journal of Accounting & Finance Research, 3(1), 16–29.
Salijeni, A., O’Driscoll, A., & Damoense, M. J. (2021). Big Data Analytics and audit quality: A systematic review. Journal of Accounting & Organizational Change, 17(4), 515–535.
Serag, A. H., & Al-Aqiliy, A. R. (2020). Contextual factors influencing Big Data Analytics adoption for audit quality: A TOE framework. International Journal of Accounting, Auditing and Performance Evaluation, 16(4), 382–401.
Sekaran, U., & Bougie, R. (2020). Research methods for business: A skill-building approach (8th ed.). Wiley.
Sun, J., Du, X., & Cheng, D. (2020). Big Data Analytics and audit quality: Evidence from Chinese listed companies. Journal of Contemporary Accounting, 29(1), 1–17.
Susanti, E., & Kurniawan, S. (2022). The influence of Big Data and auditor competency on audit quality with audit risk as moderating variable. International Journal of Social Science, Education, Communication and Economics, 1(3), 405–414.
Vasarhelyi, M. A., Kogan, A., & Tuttle, B. M. (2015). Big Data in auditing: A continuous auditing approach. The CPA Journal.
Vasconcelos, A. F. A., & Aguiar, J. R. A. (2020). The impact of Big Data on auditing: A systematic literature review. International Journal of Accounting and Financial Reporting, 10(1), 1–17.
Zhang, H., Yu, J., & Wang, W. (2022). The application of Big Data Analytics in auditing: A review and future research directions. Journal of Business Research, 149, 81–90. https://doi.org/10.1016/j.jbusres.2022.05.029
https://doi.org/10.1108/JFRA 12 2023 0724
Al Lawati, H., & Hussainey, K. (2024). Forward looking disclosure and short term liabilities: evidence from Oman. International Journal of Accounting, Auditing and Performance Evaluation, 20(1/2).
https://doi.org/10.1504/IJAAPE.2024.135527
Al Ateeq, B., Sawan, N., Al Hajaya, K., Altarawneh, M., & Al Makhadmeh, A. (2022). Big Data Analytics in Auditing and the Consequences for Audit Quality: A Study Using the Technology Acceptance Model (TAM). Corporate Governance and Organizational Behavior Review, 6(1), 64–78.
https://doi.org/10.22495/cgobrv6i1p5
Al-Maqoushi, S. T., Al-Dmour, R. H., & Al-Husban, F. (2023). The impact of Big Data Analytics on audit quality in Jordanian commercial banks. Journal of Accounting and Finance Research, 3(1), 1–15.
Alles, M., Kogan, A., & Vasarhelyi, M. A. (2018). The future of audit: Implications of Big Data for the profession. Routledge.
https://doi.org/10.2308/ajpt-51684
Appelbaum, D., Kogan, A., & Vasarhelyi, M. A. (2017). An examination of Big Data for audit and assurance. Auditing: A Journal of Practice & Theory, 36(4), 1–24. https://doi.org/10.2308/ajpt-51684
Brown-Liburd, H., Issa, H., & Lombardi, D. (2015). Big Data and analytics: New opportunities for audit research. Auditing: A Journal of Practice & Theory, 34(Suppl. 1), 1–18.
https://doi.org/10.2308/ajpt-10445
Cao, L., Chychyla, R., & Funk, J. (2015). Big Data and analytics in accounting: A review and opportunities. Journal of Information Systems, 29(4), 1–18. https://doi.org/10.2308/isys-51023
Dagiliene, L., & Kloviene, L. (2019). The impact of Big Data on external audit quality. European Research Studies Journal, 22(3), 195–208.
https://doi.org/10.1108/MAJ-01-2018-1773
Ditkaew, K., & Suttipun, M. (2023). The impact of audit data analytics on audit quality and audit review continuity in Thailand. Asian Journal of Accounting Research, 8(3), 269–278.
https://doi.org/10.1108/AJAR 04 2022 0114
DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–199.
https://doi.org/10.1016/0165-4101(81)90002-1
Deloitte. (2015). From transactions to insights: The next generation of audit analytics. Deloitte Touche Tohmatsu Limited.
Deloitte. (2024). The future of audit: Navigating data complexity .
EY. (2016). The value of audit quality: How audit quality contributes to the resilience of financial markets. Ernst & Young Global Limited.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2021). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Sage Publications.
Hezam, Y. A. A., Anthonysamy, L., & Suppiah, S. D. K. (2023). Big Data Analytics and Auditing: A Review and Synthesis of Literature. Emerging Science Journal, 7(2), 629–642.
https://doi.org/10.28991/ESJ 2023 07 02 023
Huy, N. T., & Hung, N. T. (2022). The impact of Big Data Analytics on audit quality in Vietnamese public accounting firms. Journal of Accounting and Finance, 22(1), 50–65.
Kend, M., & Nguyen, H. (2020). The impact of Big Data Analytics on audit quality: Evidence from Big Four firms. Accounting & Finance Research, 9(3), 45–58. https://doi.org/10.5430/afr.v9n3p45
KPMG. (2015). Audit in a data-driven world: How technology is transforming the audit. KPMG International.
KPMG. (2024). Data privacy and the evolving audit landscape [Whitepaper].
Laney, D. (2001). 3D data management: Controlling data volume, velocity, and variety. Gartner. [Whitepaper]
Mahyuni, L. P., Gede Putra, I. P. A., & Yuniarta, G. A. (2021). The effect of Big Data Analytics capability on audit quality through continuous auditing and auditor competence. Jurnal Ilmiah Akuntansi dan Bisnis, 16(2), 205–217. https://doi.org/10.24843/JIAB.2021.v16.i02.p06
Manyika, J., Chui, M., Brown, B., Bughin, J., Dobbs, R., Roxburgh, C., & Byers, A. H. (2011). Big Data: The next frontier for innovation, competition, and productivity. McKinsey Global Institute.
Meli, F., & Hu, N. (2022). Digital transformation and emerging risks in audit: A Big Data perspective. Journal of Accounting and Technology, 15(4), 1–18.
Mitchell, I., et al. (2012). Big Data and analytics in the audit profession. [
Nasta, L., Magnanelli, B. S., & Alessi, G. (2024). Beyond the numbers: exploring the multifaceted impact of big data analytics on auditing. International Journal of Auditing Technology, 2024 (Online ahead of print), 40–58. https://doi.org/10.1504/IJAUDIT.2024.139976
Ngai, E. W. T., Hu, Y., Wong, Y. H., Chen, Y., & Sun, X. (2011). The application of data mining techniques in financial fraud detection: A systematic change. Expert Systems with Applications, 38(8), 10398–10408.
https://doi.org/10.1016/j.eswa.2011.02.021
Rounaq, Z. K., Zamil, A. R., & Sathi, Z. J. (2023). Impact of Big Data Analytics on audit quality: Evidence from Bangladesh. Journal of Accounting & Finance Research, 3(1), 16–29.
Salijeni, A., O’Driscoll, A., & Damoense, M. J. (2021). Big Data Analytics and audit quality: A systematic review. Journal of Accounting & Organizational Change, 17(4), 515–535.
Serag, A. H., & Al-Aqiliy, A. R. (2020). Contextual factors influencing Big Data Analytics adoption for audit quality: A TOE framework. International Journal of Accounting, Auditing and Performance Evaluation, 16(4), 382–401.
Sekaran, U., & Bougie, R. (2020). Research methods for business: A skill-building approach (8th ed.). Wiley.
Sun, J., Du, X., & Cheng, D. (2020). Big Data Analytics and audit quality: Evidence from Chinese listed companies. Journal of Contemporary Accounting, 29(1), 1–17.
Susanti, E., & Kurniawan, S. (2022). The influence of Big Data and auditor competency on audit quality with audit risk as moderating variable. International Journal of Social Science, Education, Communication and Economics, 1(3), 405–414.
Vasarhelyi, M. A., Kogan, A., & Tuttle, B. M. (2015). Big Data in auditing: A continuous auditing approach. The CPA Journal.
Vasconcelos, A. F. A., & Aguiar, J. R. A. (2020). The impact of Big Data on auditing: A systematic literature review. International Journal of Accounting and Financial Reporting, 10(1), 1–17.
Zhang, H., Yu, J., & Wang, W. (2022). The application of Big Data Analytics in auditing: A review and future research directions. Journal of Business Research, 149, 81–90. https://doi.org/10.1016/j.jbusres.2022.05.029