Abstract
An audit of financial report is a review of the organization financial statement that carried out by the independent and professional in their field which is the Auditor. The Big Data methodology offered a different approach compared to the current audit procedure, which mostly using manual process. Big Data equipped with learning capabilities and automation process in order to achieve better and faster result. Another advantage of using Big Data methodology is to provide comprehensive and multi-dimensional view of the problem. This paper provides a framework to incorporated auditing process and Big Data approach, specifically by mapping the internal and external data source to one of audit process stage, which is risk assessment process.
Highlights
Data mining is the application of specific algorithms for extracting The process and the business overview from an organization or company can be seen in a financial report made by the management and as the party that is responsible for the financial report, the management needs the auditor as an independent party to audit the financial report because of the possibility that such financial report contain misstatements, to ensure the fairness in accordance with Accounting Standards and IFRS, the obligation to give the annual financial report to the government as the taxes supporting data and if it listed at the Indonesian Stock Exchange they should give the financial report periodically
In the first stage of the audit process that is risk assessment, the auditor performs the risk assessment procedure and in this stage the auditor identifies and assesses the risk of material misstatement (ISA 200.13) in financial report, by understanding the entity, among others are the purpose of entity, the external factor, the nature of entity, accounting policy, the measurement of financial performance and internal control (Tuanakotta, 2015)
After knowing the sources of risk as well as assessing the likelihood of risk being the cause of material misstatements in the financial report, this process will provide guidance and information needed to direct its audit efforts to areas where risk is high or needs special attention (Tuanakotta, 2015)
Summary
Data mining is the application of specific algorithms for extracting The process and the business overview from an organization or company can be seen in a financial report made by the management and as the party that is responsible for the financial report, the management needs the auditor as an independent party to audit the financial report because of the possibility that such financial report contain misstatements, to ensure the fairness in accordance with Accounting Standards and IFRS, the obligation to give the annual financial report to the government as the taxes supporting data and if it listed at the Indonesian Stock Exchange they should give the financial report periodically. The external data sources are in the unstructured form, for example: data from the news, conversation data on social media, forum, and the other media online Both structured and unstructured data can be processed using data analytics model such as data mining, social network analysis, and text mining. An example is in the classification model, how we can find the pattern of a positive or negative opinion, with the identification of certain features, we can group the new opinion data into positive or negative class. Another model is the extraction of important information from documents based on keywords, entities, summaries, and other models in the Text Mining family group. There are other important models in Big Data framework for example regression model, cluster, association, and others
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