2020 International Conference on Computer Engineering and Application (ICCEA)
A Study on the Application of the Technology of Big
Data and Artificial Intelligence to Audit
Zhang Xing
Department of Finance and Audit
Army Logistics University
Chongqing, China
zhangxingaudit@163.com
Zhang Lijun
Joint Logistics Academy
National Defense University
Beijing, China
Abstract—Artificial intelligence has great advantages in
improving the audit efficiency, reducing the audit risk and
changing the work mode, which can help find value and create
value for audit, and greatly improve the quality of audit. But it
will also bring some new technical and systemic risks, which have
profound influence on the subject and object. The theory and
practice of audit must be carefully analyzed, in particular, by
using data mining to make audit judgments, using association
statistics to detect trails, using cluster analysis to determine the
focus of audit content, using intelligent visualization to speed up
the progress of audit, using distributed processing system to
improve the effectiveness of audit.
Keywords—Artificial intelligence, audit, Efficiency, Rationality
I. INTRODUCTION
In recent years, big data and artificial intelligence (AI) have
been developed and widely used, which has had a great impact
on, economic, cultural and people's lives. As advanced forms
of information technology, big data and AI also have a
profound influence on the concept, mode, form, method and
construction of audit.
It is of great significance to understand the development
trend of intelligent technology and the application of related
industries, to study the influence of intelligence on audit and its
application prospect, which will promote the transformation of
audit to intelligence era, speed up the construction of modern
audit technological, and improve the efficiency of audit quality.
II. THE APPLICATION OF BIG DATA AND AI IN THE FIELD
RELATED TO AUDIT
With the accumulation of big data, the innovation of
theoretical algorithms and the improvement of computing
power, AI technology has made breakthrough progress in many
fields and ushered in a period of prosperity and development.
The technology of big data and AI has been applied in the
Supported by the Science and Technology Research Program of Chongqing
Municipal Education Commission (Grant No.KJQN201912906) and National
Social Science Fund (Grant No.2019-SKJJ-C-015).
978-1-7281-5904-1/20/$31.00 ©2020 IEEE
DOI 10.1109/ICCEA50009.2020.00174
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Li Zhu
Joint Logistics Academy
National Defense University
Beijing, China
fields of finance, finance and judicature, which are more
relevant to audit work, and the effect is obvious.
A. The application of big data and AI in the banking industry
The financial industry is the pioneer of the application of AI,
through the use of big data, cloud computing and etc. to
effectively enhance the efficiency of financial institutions,
expand the breadth and depth of financial services, to achieve
the intelligent, personalized, customized financial services. In
the 2009, the "unmanned bank" of China Construction Bank's
Shanghai branch officially landed, becoming the first
unmanned bank in the country to offer face-ID withdrawals,
robotic services, and VR experiences. In the same year, Bank
of Communications also began to implement intelligent
upgrading in the service, marketing, intelligent outlets,
investment, wind control and other scenarios. Through
consumer consumption habits and other big data analysis, the
internet financial industry offered customized financial services.
The financial industry has been injected with great vitality and
been promoted the transformation and upgrading of the
financial industry from digitalization to Intelligent.
B. The application of big data and AI in the finance area
AI first changed the input and output mode of financial
information and the robot automation process technology
became the core technology. With the cognitive technology to
assist the financial solution, it makes the uninterrupted
processing of accounting statistics business data, audit bill data,
the preparation of accounting vouchers and other basic
financial work more convenient. In the future, big data and AI
will also make full use of intelligent technology such as image
recognition, speech recognition, semantic recognition,
biometric recognition, machine depth learning and etc., and
implement intelligent interaction, intelligent prediction,
intelligent analysis, intelligent recommendation and other
functions, and gradually expand to financial planning and
forecasting, decision-making, budget, risk control and other
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specific projects. It will bring unprecedented efficiency
revolutions to the financial sector.
C. The application of big data and AI in the judiciary
In 2018, the Supreme People’s Procuratorate of the People's
Republic of China issued the opinions on deepening the
construction of intelligent inspection, and put forward the
overall structure of intelligent inspection, and using unmanned,
IT-supported and Intelligent technical means to lead the
modernization of prosecuting. The procuratorate in Hangzhou,
China, used the remote interrogation system and intelligent
voice-assisted processing cases to alleviate the pressure of
human resource [3]. Some other judicial organs in China have
tried to use computer vision technology to analyze video,
automatically troubleshoot risk points, and aid with prosecutors
to exclude illegal evidence. The AI provides a multi-level and
full-range technical supply of for judicial work, and fully
realizes the new working & management mode.
III. THE ANALYSIS OF THE INFLUENCE OF BIG DATA AND AI
ON AUDIT
In the framework of audit relationship, the Intelligence not
only plays a direct role in the first relationship of audit, but also
has a profound influence on the second and third relationship
people, and even reconstructs the audit principles, such as audit
hypothesis and audit relationship.
A. Significantly improvement of the effectiveness of audit
Intelligent technology enables fast access to complex data,
reduced operating time, and reduces human resources
consumption. More importantly, as a new productivity factor,
intelligent technology can develop traditional information
technology into intelligent cognitive technology, which
automatically identify, excavate and judge the information, so
that the auditors will focus more on important audit decisions
and thus significantly improve the audit effect. Although Big
Data and data analytics are two independent concepts, these
two concepts can be interrelated. Michael Alles, Glen L. Gray
(2016) illustrates how these two concepts can be related in the
audit domain (Table 1).
TABLE I. PATHS TO EXPAND DATA ANALYTICS IN FINANCIAL STATEMENT
AUDITS
Data Analytic Techniques
Traditional Extended
(e.g. Excel) ˄ e.g.
Predictive
analytics˅
Traditional (e.g. A B
Accounting & mining, statistical analysis, clustering analysis, correlation
Financial)
Data
Sources Extended (Non- C D
Financial Data to
Big data
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B. Overall change to the audit risk structure
Intelligent technology makes "sample is the overall"
possible. On the one hand, the adequacy of audit evidence is
absolutely guaranteed, and on the other hand, for the
appropriateness of audit evidence, through intelligent
comparing of the information, mining tacit knowledge,
carrying out multi-angle and cross-domain comprehensive
correlation analysis, the quality of audit evidence is not only
reliable but also more relevant, and the risk of subjective
inspection can be significantly reduced. However, it should be
noted that in the case of defects in hardware and software, also
with the human interference, the data security risk and systemic
risk of intelligent audit will also become higher.
C. A profound impact on the audit organizational model
Intelligent technology can get real-time information from
the distant field and form corresponding conclusions to achieve
instant monitoring of all data within the target range. The
cross-fusion application of advanced technology enables
auditors to receive and identify unstructured and non-
standardized data, realize parallel docking with business data
platform of entities, synchronize mining and tagging of risk
points in various types of business activities, and expand audit
business model, which will accelerate the realization of
dynamic audit, full-time audit, and no project audit.
D. The change of the expected behavior of audit objects
It is the basic premise of intelligent audit that the entities
realize the standardization and structure of its own business
activities and data, and this process is itself the behavior of the
entities to strengthen the internal control and improve the
quality of management. In the meantime, under the assumption
that the audit institution can fully grasp all the information of
the entities, the audited units and personnel will inevitably
change the tendency and behavior of opportunism.
E. The Contribution to the achievement of the audit with
civility
The value of intelligent auditing lies in enlightening
wisdom. The Austrian Court of Audit, through data analysis,
found that the general practitioner is the first person whom the
psychiatric patients contact to, and therefore came up with the
proposal to strengthen the training of general practitioners with
the skills of mental health care. Through the data analysis of
cross-level, multi-dimensional and brain-storming, intelligent
audit is expected to give birth to the civilized gene of auditing
IV. THE APPLICATION OF BIG DATA AND AI IN THE AUDIT
Artificial intelligence is the organic integration of a series
of key technologies, platforms and systems, such as data
analysis, visualization technology and cloud computing. The
introduction of big data and AI technology in the field of audit
will realize the comprehensive application of this intelligent
organism.
A. Using data mining to make audit judgments
Data mining technology is the process of automatic
identification and analysis of special relational information
hidden in data. Data mining generally uses various analytical
methods and techniques, to accumulate a large number of
complex historical data, in the process of analysis, induction
and integration of work, so to extract useful information and
find meaningful and user-interested data. In fact, data mining is
not just a technology or a set of software, but a combination of
several professional and technical applications. Modern
companies often collect massive amounts of data or high-
dimensional data that include important information such as
markets, customers, suppliers, competitors, and future trends,
but information overload and unstructured make it impossible
for decision makers to make effective use of existing
information. If we can mine valuable information and
knowledge from a large number of databases through data
mining technology, and use it as decision support, we will
increase the competitive advantage of enterprises.
Facing the large amount and heterogeneous information,
auditors can improve the speed and accuracy of data
acquisition and analysis by using data mining technology, and
assist in locating valuable information, so as to make accurate
judgments and decisions. Through the using of intelligent
mining technology, the analyses of data attribute characteristics,
the various types of financial data, business data at different
levels, angles, granularity, the audit institutions can get a
comprehensive understanding of the entities. In the practice of
social intelligent audit, the auditors have tried to use the data
mining technology, which provides a complete and feasible
auxiliary scheme for the audit analyses, which significantly
improves the efficiency of data analysis, and is worthy of
reference for audit.
B. Using association statistics to detect trails
Association statistics is the technology based on
discriminant analysis, regression analysis and other
mathematical model methods, and applying data information
classification and prediction. By excavating the information,
the standard statistical model is established to analyze, predict,
compare and correlate all kinds of information materials which
are structured or unstructured by the audited units, so as to help
the audit subjects find the clues. Taking the audit of military
financial management as an example, intelligent statistical
prediction and correlation analysis are carried out through the
audit basis such as the annual plan task, budget index document,
disbursement of funds, goods purchases, price determination
process, contract performance supervision, fund payment and
settlement, regulatory documents, management standards, etc.
It will not only grasp the audit period budget implementation
rate, task completion rate, inventory integrity rate and other
indicators, but also help the auditors determine the audit focus,
strengthen the substantive testing and review through the audit
estimate and the deviation of the forecast value.
It is a key step to build a data analysis model within the
audit progress in the big data environment. Data analysis
models can be divided into overall analysis models and
individual analysis models. The overall analysis model is
mainly used to grasp the overall situation and lock on the key
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problems, and the individual analysis model is mainly used to
filter the trails. Auditors should build big data analysis models
as follows (Fig. 1).
The analytical methods commonly used to construct audit
analysis models include:
1) Comparative analysis: comparing data for a given
period with standard data, e.g. planned data, budget data,
previous data, good practice data.
2) Trend analysis: time series analysis is generally used to
compare data for different periods of the same entity.
3) Ratio analysis: the method of setting ratios to establish
the connection between different data, and then comparing and
analyzing the trend of ratios.
4) Structural analysis: the analysis of the proportion of a
matter in the overall, so as to determine the focus of audit.
5) Factor analysis: the analysis of several related factors
on a certain indicator, so as to determine the impact of the
factors are relatively large, in order to target the key areas.
6) Forecast analysis: forecast the state of the future for a
certain period.
C. Using cluster analysis to determine the focus of audit
content
Clustering analysis is the classification of individuals in the
general according to an approximate attribute, so that the
distance between the same category of individuals can be
smaller, which will provide different types of information for
information users with different needs. This method has
obvious effect on the mining and analysis of singular points.
When the auditors analyze the data of the entities, it usually
checks the extreme value of the data and analyzes the
anomalies and deviations. For example, for a unit that has not
carried out major training or sudden tasks in recent years, the
distribution of accounting data for its maintenance funds should
have a certain degree of stability. However, if there is an
unusual change in the data, it means that these singularity
points may hide important information. Therefore, by using
cluster analysis technology, we can effectively identify the
dense region and sparse region of data analysis, so that the
auditors can easily find the regularities of distribution of the
information and the relationship between the data, so as to
further determine the audit focus.
Figure 1. Big data analysis models in the audit.
 By analyzing the audit data in the process and of audit
projects, we found that same standards of local data are
maintained, stored on one or more database servers, and the
parallel processing of the database cluster can be used to speed
up the data analysis process. Related policies and regulations
implement data sets with the same standards, and can split
large data tables without affecting the audit process, and copy
the policy parameter tables and tables with small amounts of
related data into each database, depending on the appropriate
zoning strategy. When the audit method is executed, different
execution parameters are set according to the policy and
regulations, and all audit data are processed in parallel.
D. Using distributed processing system to improve the
effectiveness of audit
The application of various intelligent technologies depends
on the system platform. The distributed processing system is a
comprehensive information system platform composed of
several interconnected information processing systems. For
users, the distributed system is no different from other
application systems. As a separate system, but from the
underlying physical equipment and structural system,
distributed system is a large, complex system, composed of
several independent computers. From the view of hardware
point, the machine of the distributed system is independent,
different computers can be distributed in all corners of the
world. And from the view of software point, the interface
between the distributed system and the user is a single one,
who cannot directly feel the dispersion of the operating system.
The internal structure, communication mode and function of
the distributed system are transparent to the user, which is the
biggest feature of the system. In addition, although the
distributed system is composed of several independent
computers, when solving a specific problem, each part can
achieve efficient and unified task instructions, can interact with
the user anytime, anywhere, improving the performance of the
system, and also improve the user experience.
The processing mode of distributed system pays attention to
the real-time monitoring of audit work and the coordination
processing of audit business. Through the grasp of important
data information, the distributed system can reduce the fraud
situation in the process of audit, improve the quality and effect
of audit. At present, the audit software used by the audit
institutions is more complicated and the compatibility is low,
so it is difficult to provide an immediate and quick audit trail
for the audit subject. Therefore, it is necessary to speed up the
introduction of big data and AI technology, unify data
generation and acquisition way, integrate the business
management software system of the entities with the audit
operation software, give full play to the advantages of the
distributed processing system to connect with each other and
support each other, improve the efficiency of audit work, and
explore the audit value.
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V. CONCLUSION
The rise of big data and AI technology, on the one hand,
has brought unprecedented opportunities for the development
of audit innovation, profoundly affected the behavior and
decision-making of audit stakeholders. On the other hand, it
has also posed a great challenge to audit, which effectively
reduces inspection risk, control risk and even inherent risk, but
also brings new technical risk, systemic risk. While
significantly saving the cost and time of audit, how to eliminate
the huge cost of technology application, platform construction
and personnel training will become a new problem. Therefore,
in the desire to really travel on the "fast track" of big data and
AI audit, it is also necessary to explore more on the "Long
Road" of theory and practice.
ACKNOWLEDGMENT
This work is financially supported by the Science and
Technology Research Program of Chongqing Municipal
Education Commission (Grant No. KJQN201912906) and
National Social Science Fund (Grant No.2019-SKJJ-C-015).
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