Name
Audit Data Analytics and Audit Outcomes
Date & Time
Monday, July 6, 2026, 3:00 PM - 3:25 PM
Description
Recent technological advances have led to the growing adoption of advanced audit data analytics (ADA). While these tools are expected to enhance auditors’ ability to analyze complex data and exercise professional judgment, empirical evidence on how advanced ADA affects audit outcomes remains limited despite substantial investment by audit firms. This study investigates how auditors’ use of advanced ADA in areas involving significant and complex audit judgments affects audit effectiveness and audit production timing. To capture auditors’ use of advanced ADA, we develop a comprehensive dictionary capturing advanced ADA terms and apply it to auditors’ disclosures in Critical Audit Matters (CAMs) for U.S.-listed firms from 2019 to 2022. Using this novel dataset, we find that auditors’ use of advanced ADA is associated with a lower likelihood of restatements, indicating improved audit effectiveness. These benefits are more pronounced when auditors utilize advanced ADA more intensively, employ prescriptive ADA tools, and are industry specialists. We do not find a significant association between ADA use and audit production timing. Our findings provide new evidence on how auditors’ use of advanced ADA affects audit outcomes, offering important implications for auditors, audit firms, and regulators.
Hongzan Josh Zhu
Keywords
Audit effectiveness; Audit efficiency; Audit quality; Critical audit matters; Data analytics; Financial restatements.
Theme
AUDITING
Author 1
Hongzan Josh Zhu
Author 2
Gladys Lee
Author 3
Xinning Xiao