For the analysis of data obtain from the source of accounting and operational system various analytical

tools or systems have been applicable since the recent past.

Few organizations so far performing data analytics for the testing and verifying their day to day
transactions, moderately passing through long established techniques of sampling. 100% population’s
data is used by auditors via data analytics when they are performing their tests. Using the data analytics
(D & A) techniques we can make the past result more accurate and perceptive. Despite of sampling data
transactions to test a print of exercise, we are now able to evaluate all transactions processed, granting
us to classify inconsistency and drag down on the components that provide better capability of being
high risk. Our system brutalizes this process, enhancing its ability to provide better quality audit
evidence.’ Moving further the next stage for finance person and auditors is to apply AL and ML
algorithms to sharpen the quality of analysis and forecasting by which they can increase the rate of
fraud detection

The business ‘data warehouse’ is progressively being supplemented by available information obtain
from various source of public and/or proprietary, generally applying cloud-based applications connected
with desktop analytical tools. Enlarging these tools with DL and NLP raises the scope of data which can
be handled, from written text speech or even images. The competency to analyze data beyond and
outside corporate data cellar promises to strengthen the ability of organization to identify opportunities,
overcome the threats, take satisfactory decisions and empower this process to be ‘democratized’ all
over the firm. Auditors can use ‘data mining software’ to dig out and capture anomalies- possibly
supported by AL- spotlight resources on classifying risk along with monitoring business as usual’
activities

 Distributed ledger technology - DLT (definition – benefits – limitation – impact):

DLT, related to technologies that add block chain which is a better concern for both auditors and
businesses. From auditors point of view distributed ledgers develops into universal bookkeeping
service, eliminating the requirement of reconciling multiple databases of records and presenting a
perfect audit trail. A key principle of DLT is immutability: entries belong to historical data cannot be
edited however, only rectified with a balancing entry. Although this may assist auditors to test audit
assertions like occurrence and cut-off, the requirement for higher level auditor judgments does not be
eliminated by this. Transactions may be present outside the ledger although those records are
improbably false, yet they might not be appropriate. Because of this the ledger available information
should be combined with judgments based on accounting principles by the auditors and considerate of
the nuances applicable to ownership and valuation. For auditors, DLT offers the feasibility of preparing
exception reports which are positioned on all transactions despite of using sampling techniques –
a return to the roots of auditing. In the current era audit cycle could probably be substitute by more
effective even continuous, real-time, audit. This is expected to discharge available resources and present
the material for a broad and more contextual understanding of the business, as appropriate for the
production of extended audit reports. Nonetheless, this is also presumably boost resources with
specialized skills in DLT, at least in the short-term. While DLT may be backed by standardization and
automation of data collection – possibly via ‘accounting-as-a-service’ platforms – the removal of banal
tasks and assignments will carry the augmentation of the auditor’s judgment into stronger focus.

 Machine learning’s - ML (definition – benefits – limitation – impact):

A leading provocation to the audit profession has been the extreme proliferation of data, shadowed by a
less uttermost but anyway briskly growing volume of regulation. ML uses statistical analyses to generate
predictions or make decisions from the analysis of a large historical dataset. The accounting software
company Xero has implemented ML to make coding decisions for invoices. ML can achieve surprising
levels of accuracy quite quickly: in the case of Xero’s software, after learning from only four invoices the
system attains 80% certainty. ML ‘predictions’ can be both backward and forward-looking. It has
prominent applications in risk management and the identification of fraud and inaccuracy by contrasting
historical data sets with current data, which in return will be helped with risk assessment either it can
foster, predicting, just like an example the most probably value of assets in future. In practice, the
advantages of ML is crucially interlink on the data it ‘learns’ from. This gets into the point that the
accessibility of bias is ever present. By considering the examples where ML proposes bias into areas like
credit-scoring and CV assessment. It was perfectly identified by the machine that earlier excluded group
had not yet finished many successful loan transactions or progressing very high in management and
conclusion was wrongly stated by which characteristics of those groups were defined such as gender,
were predictors of poor future performance.