Auditing Symposium XIII: Proceedings of the 1996 Deloitte & Touche/University of Kansas Symposium on Auditing Problems

Meeting the challenge of technological change -- A standard setter\u27s perspective / James M. Sylph, Gregory P. Shields; Technological change -- A glass half empty or a glass half full: Discussion of Meeting the challenge of technological change, and Business and auditing impacts of new technologies / Urton Anderson; Opportunities for assurance services in the 21st century: A progress report of the Special Committee on Assurance Services / Richard Lea; Model of errors and irregularities as a general framework for risk-based audit planning / Jere R. Francis, Richard A. Grimlund; Discussion of A Model of errors and irregularities as a general framework for risk-based audit planning / Timothy B. Bell; Framing effects and output interference in a concurring partner review context: Theory and exploratory analysis / Karla M. Johnstone, Stanley F. Biggs, Jean C. Bedard; Discussant\u27s comments on Framing effects and output interference in a concurring partner review context: Theory and exploratory analysis / David Plumlee; Implementation and acceptance of expert systems by auditors / Maureen McGowan; Discussion of Opportunities for assurance services in the 21st century: A progress report of the Special Committee on Assurance Services / Katherine Schipper; CPAS/CCM experiences: Perspectives for AI/ES research in accounting / Miklos A. Vasarhelyi; Discussant comments on The CPAS/CCM experiences: Perspectives for AI/ES research in accounting / Eric Denna; Digital analysis and the reduction of auditor litigation risk / Mark Nigrini; Discussion of Digital analysis and the reduction of auditor litigation risk / James E. Searing; Institute of Internal Auditors: Business and auditing impacts of new technologies / Charles H. Le Grandhttps://egrove.olemiss.edu/dl_proceedings/1012/thumbnail.jp

Integrating Data Mining Techniques for Fraud Detection in Financial Control Processes

Detecting fraud in financial control processes poses significant challenges due to the complex nature of financial transactions and the evolving tactics employed by fraudsters. This paper investigates the integration of data mining techniques, specifically the combination of Benford's Law and machine learning algorithms, to create an enhanced framework for fraud detection. The paper highlights the importance of combating fraudulent activities and the potential of data mining techniques to bolster detection efforts. The literature review explores existing methodologies and their limitations, emphasizing the suitability of Benford's Law for fraud detection. However, shortcomings in practical implementation necessitate improvements for its effective utilization in financial control. Consequently, the article proposes a methodology that combines informative statistical features revealed by Benford’s law tests and subsequent clustering to overcome its limitations. The results present findings from a financial audit conducted on a road-construction company, showcasing representations of primary, advanced, and associated Benford’s law tests. Additionally, by applying clustering techniques, a distinct class of suspicious transactions is successfully identified, highlighting the efficacy of the integrated approach. This class represents only a small proportion of the entire sample, thereby significantly reducing the labor costs of specialists for manual audit of transactions. In conclusion, this paper underscores the comprehensive understanding that can be achieved through the integration of Benford's Law and other data mining techniques in fraud detection, emphasizing their potential to automate and scale fraud detection efforts in financial control processes

Computer-assisted audit tools and techniques use: Determinants for individual acceptance

During the last fifteen years, several studies on the research topic of Individual Technology Acceptance have been developed, and several new models have been proposed. All these models aim to understand and define determinant contributions for the acceptance of technologies and what the drivers leading to successful adoption are. This dissertation’s main emphasis is to gain an understanding of individual acceptance of Computer-assisted Audit Tools and Techniques (CAATTs) in the context of Portuguese Statutory Auditors. Previous research in other countries, utilizing several and distinct research universes, has informed this work and the definition of the main objectives of the present research. This dissertation has as its main objectives: 1) understanding the tasks in which CAATTs are used; 2) to identify the adoption drivers of CAATTs; 3) to explore the current usage of CAATTs among statutory auditors and 4) to develop a CAATTs adoption model. To reach the objectives two studies were conducted: a qualitative study, supported by interviews to experts, and a quantitative study operationalized by a questionnaire to 110 Portuguese statutory auditors. This latter study was the cornerstone, which allowed testing the CAATTs acceptance model. This dissertation presents significant contributions impacting the various stakeholders: individual Statutory Auditors, Statutory Auditors Firms, The Portuguese Institute of Statutory Auditors, Software houses and higher education.Nos últimos 15 anos, vários estudos de investigação foram desenvolvidos abordando a temática da aceitação individual de tecnologia, tendo sido apresentados novos modelos. Esses modelos têm como objetivo compreender e identificar os determinantes sobre a aceitação de tecnologias que levem a uma adoção bem-sucedida. A principal ênfase da tese é compreender a aceitação individual de “Tecnologias de Informação para Auditoria”, também designadas, em Português, por “Ferramentas Informáticas de Suporte à Auditoria” ou “Técnicas de Auditoria Assistidas por Computador” (CAATT), no contexto dos Revisores Oficiais de Contas em Portugal. Investigações anteriores realizadas em diferentes países, com distintos universos de investigação, inspiraram este trabalho na definição dos principais objetivos da presente pesquisa. A presente dissertação tem como principais objetivos compreender as tarefas em que as CAATT são utilizadas; identificar os fatores de adoção de CAATT; explorar o atual uso de CAATT entre Revisores Oficiais de Contas e desenvolver um modelo de adoção de CAATT. Para alcançar estes objetivos foram realizados dois estudos: um estudo qualitativo e exploratório, apoiado por entrevistas com peritos, e um estudo quantitativo operacionalizado através de um questionário a 110 Revisores Oficiais de Contas portugueses. Este estudo foi a pedra angular que permitiu testar o modelo de aceitação de CAATT. Esta dissertação apresenta contribuições significativas com impactos para os principais stakeholders: Revisores Oficiais de Contas, empresas, Ordem dos Revisores Oficiais de Contas, software houses e instituições de ensino superior

Tax evasion by small and medium sized enterprises (SMEs) and the role of forensic accounting : the Malaysian perspective

The aim of this research is to identify and define the characteristic behaviour of and factors that influence taxpayers in small and medium-sized enterprises (SMEs) when they either evade tax or comply with tax law. The study also attempts to assess the extent of tax evasion by SMEs in Malaysia. In addition, another concern is also to explore both the actual and potential role of forensic accounting with the focus on improving current enforcement strategies for deterring tax evasion by SMEs. The research findings will contribute to the current limited literature on the tax compliance of SMEs and forensic accounting, especially with respect to Malaysia. Using a multi-method approach, the results of this thesis suggest that the extent of tax evasion by SMEs in Malaysia is both widespread and frequent. The findings also indicate that the offences tend to be deliberate evasion without any sophisticated tax-planning scheme. Understatement of gross profit and overstatement of expenses other than the cost of goods sold are the most frequently used methods. The fact that most taxpayers are unlikely to be detected and penalised by the tax authority is also another factor shaping tax evasion by SMEs. Most SMEs are heavily reliant on tax practitioners to guide them to comply with their income tax matters and will remain with the same tax practitioner in general; however, there is a tendency for some to switch tax practitioner for whatever reason they think fit. Forensic accounting is a field that encapsulates all other areas in the use of accounting for investigative purposes. Forensic accounting is a relatively new discipline in Malaysia; however, the awareness of forensic accounting by tax practitioners and IRB (Inland Revenue Board Malaysia) personnel is strong. The techniques used in forensic accounting are not new to the IRB; however, the IRB personnel need further exposure to and training in these techniques. The finding indicates a lack of sophisticated planning in tax evasion by SMýs in Malaysia. Despite this, forensic accounting technique could be added to the existing tools necessary to bring about the successful investigation and prosecution of those involved. The study was carried out at a time of change for the IR

Does transparency come at the cost of charitable services? Evidence from investigating British charities

Recent high-profile scandals related to misuse of funding and donations have raised the demand for scrutiny over financial transparency and operational activities of non-profit organizations in developed countries. Our analysis challenges the common practice in the sector of using programme ratios and overhead costs as indicators for non-profit accountability. Using Benford's Law to measure irregularities in financial data for a large sample of public charities we estimate that 25% of the sample potentially misreport their financial information. We show theoretically and empirically that charities with a higher programme ratio (their level of spending on charitable activities), will be less likely to misreport their financial information only when their overhead costs (spending on governing activities) are also sufficiently high. Tighter monitoring becomes ineffective in increasing the sectoral transparency and accountability unless accompanied by a sufficiently high level of charitable spending