State Board Report
Today’s accounting students are being shown videos that portray data analytics as a tool for current and future practice, but such practices have been a long time in coming for Dr. Miklos A. Vasarhelyi, director of the Rutgers Accounting Research Center, who started on “big data” projects for Bell Labs in 1986. Speaking with Regulatory Response Committee Chair W. Michael Fritz (OH) and Standard Setting Committee Chair Catherine R. Allen (NY) during a panel session at the Western Regional Meeting, Dr. Vasarhelyi explained that data analytics improves the way auditors are assuring a measurement that someone else has given them. In every stage of the audit process there can be visualization that clearly shows the outliers.
Dr. Vasarhelyi believes the skills that students need to bring to auditing are very different from what they needed earlier. “In the age of Google, what do we need to remember?” he asked. “We need to rethink the basis of what we have to memorize and what skills students need. I think we should rethink the required curriculum.” Although he has made the suggestion that data analytics be included in the Uniform CPA Examination, he reported that the suggestion has been turned down because it is not being taught in the accounting programs. “We have to think what we will need in 2020-2030,” he commented.
Information about data analytics is readily available, Dr. Vasarhelyi pointed out. Not only are there currently more than 20 dissertations being done on advanced work in data analytics, but he suggested, “Just go to YouTube or the Rutgers website and there is information for your use. Just type in ‘data analytics’.” The International Auditing and Assurance Standards Board has appointed Dr. Vasarhelyi to its recently established Data Analytics Project Advisory Panel.
Many groups are considering data analytics, Ms. Allen said, as well as the NASBA Standards Setting Advisory Committee and the Public Company Accounting Oversight Board. The AICPA will be releasing an audit guide in August for those who do not have significant information on the field. NASBA Director-at-Large Richard Reisig (MT), a member of the Auditing Standards Board, said he believes the new guide will be a good starter document. While some Accountancy Boards are concerned that they are not ready to assess audit failure in this new environment, Mr. Reisig said, “We still have the tools to monitor CPAs. They still need appropriate audit evidence.”
“The nature of evidence is changing,” Dr. Vasarhelyi stated. “If you see a surge in product complaints on social media – something is wrong. Also non-GAAP data now exists that never did before, and that helps the work. But it changes the competencies needed.”
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