b'otherwise been difficult to catch. For example, a chart might audit to clients. A graphic, chart or dashboard can be easier show that an accounting clerk has an usually high numberto interpret than traditional tables and help clients better of transactions in a quarter, much larger than any previousunderstand what the auditor found. period or other accounting clerks. There could be a goodIn Demers advanced auditing course at the Trulaske reason for that, Demer says. But at the very least, it helpsCollege of Business, he helps students think through how the auditor identify where they want to focus their atten- to communicate data effectively and they spend time tion.working with visualizations. A lot of the firms are increas-Another task made easier by data visualization is cutoffingly looking for students who have strong skill sets in data testing, which is when the auditor determines whether trans- analytics, and data visualization is certainly a piece of that, actions have been recorded within the correct reportinghe says. Today, Higginbotham, BS Acc, M Acc 20, is an period. Comparing shipping, delivery and sales dates fromassurance associate at PwC, and Nash, BS Acc, M Acc 20, is underlying documents can be an incredibly time-consumingan audit associate at KPMG.task. With data visualization, it makes it really easy to see ifAccountingtheres a drastic cutoff between accounting periods, which makes it more obvious to the auditor that there may be afor Accountinghigher risk of sales being recorded in an incorrect period, Demer says. Similarly, data visualization is commonly used in riskBy Kelsey Allenassessment. For example, audit teams can quickly identifyTheres a reason the School of Accountancy in the Trulaske unusual trends or large deviations from forecasted levels.College of Business has been ranked among the top 10 in They might also filter and sort based on underlying accountsthe nation in research productivity by Academic Analytics: or classes of transactions, again enabling them to determineFaculty are publishing significant findings in top-tier jour-where to focus their attention during risk assessment.nals on everything from auditor conservatism and its impact Data visualization isnt just a tool to increase the efficiencyon innovation to fiscal deficits and their effect on loan-loss and effectiveness of an audit. Its also a helpful tool whenprovisions. Heres a closer look at four researchers and their it comes to communicating insights and findings from thefindings.Resource Risks Before Keith Czerney was an assistant professor of accountancy at the Trulaske College of Business, he worked that significantly revised their annual tax rate estimatesfor five years as an external auditor. So its not surprising during the year were more likely to have internal controlthat the Deloitte Faculty Scholars research focus is on audit weaknesses and to subsequently restate their financialreports. reports. Moreover, not only did this metric predict tax-re- While looking at dual-dated audit reportsreports that lated issues, it also predicted non-tax-related issues, pointingnot only include the date the fieldwork ended but also a later to the essential need to forecast income in order to forecastdate to indicate the inclusion of additional disclosurestax rates.Czerney and his colleagues noticed that the second date is This finding is interesting because it suggests that financialoften triggered by something thats called a Type II subse-statement users, and even managers themselves, can use aquent event. A subsequent event is an event that occurs after simple calculationthe standard deviation of quarterly taxa reporting period but before the financial statements for estimatesto discern financial reporting quality prior tothat period have been issued or are available to be issued. A year-end. Thus, the resources of companies and audit firmsType II subsequent event indicates that whatever happened could be deployed more cost effectively, and stakeholders,does not yet affect the amounts on the financial statement. especially investors, could make better decisions regardingSome examples: the issuance of new debt or equity, an acqui-the reliability of the financial statements, improving theirsition, property loss following the end of the fiscal year. investment selection. The lesson here: powerful infor- Take a hurricane or a wildfire that happens after the mation can come from a single estimate.companys fiscal year ends but before it files its financial For more information, please see the peer-reviewedstatements, Czerney says. Its an unpredictable event that study, Interim Effective Tax Rate Estimates and Internalcan be significantly detrimental to a business. The effect is Control Quality. not going to be reflected in the financial statement as of Dec. 31, but it will have an effect in the future. Lets at least tell 2022 Newsmagazine 17'