Big Data in Auditing: Felix Krieger - "Partly conducting audits manually".
2021-03-08 Auditing firms deal with huge amounts of data. The doctoral student at the Institute of Information Systems (IIS) is doing research on improving and introducing software tools.
The Big Four conduct audits of the majority of listed companies. In the process, the auditors deal with huge amounts of data in some cases. Increasingly, the firms were using advanced data analyses to improve their auditing work. Nevertheless, the connection between business informatics and auditing was still weak, reports Felix Krieger. He is doing his doctorate with Dr Paul Drews, Professor of Business Information Systems, in particular Digital Transformation and Information Management, and is doing research at this interdisciplinary interface.
The doctoral student is particularly interested in how unstructured data sources, especially text documents, can be made processable. Therefore, he is working on machine learning models, on the basis of which software for document analysis can be developed: "Invoices are often still manually audited. The software could be used to automatically read and evaluate information from documents." Automated processes primarily serve to increase audit efficiency. But audit quality can also be improved through automation, and the audit risk of companies, i.e. the risk of an erroneous judgement, can be reduced.
However, there are legal pitfalls: "We operate in the field of machine learning. Can data from company A be used to train software which will benefit the audit of company B?" asks Felix Krieger. In his view, the work of auditing firms is highly regulated by law. Fundamental for the doctoral student was also the question of acceptance: do auditing firms want to use advanced data analyses at all? "Importance and feasibility are assessed differently," says Felix Krieger. The professional field is very heterogeneous. Especially for small firms, the implementation of advanced data analyses is difficult. Large companies, however, could benefit greatly from modern tools because of the large amounts of data that are generated.
During the first three years of his doctorate, Felix Krieger received a scholarship, but he also worked a few hours a week at Ernst & Young, one of the Big Four accounting firms. Now he has joined the research and development division full time and will finish his doctorate there. "The company provides me with data and infrastructure," Felix Krieger reports. In return, he conducts research on software solutions: "Many auditing firms will follow the innovation step, because the companies they audit have long been digitised." In addition, he says, automated audits have another advantage: they free auditors from routine tasks, allowing them to concentrate on more complex issues.
Felix Krieger studied economics at the University of Osnabrück. After his bachelor's degree, he completed an internship with Bosch in an IT project in controlling. In 2017, he completed the Master's in Management & Controlling/Information Systems at Leuphana.