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EXAMPLE 
For the 
accountant 
and 
auditor
big data and data analytics can 
increase the effectiveness
of their work. 
Data analytics on big data can assist with the identification, quantification and management of risk. 
Predictive analytics
helps auditors better target their work on key risks, improving the relevance of 
audits, for example it can be used by an auditor to find all sales transactions recorded near to or over the 
materiality level. 
Audit technologies
may also be embedded within an organisation’s accounting system, 
allowing the auditor to increasingly rely on the work of the internal audit team.
 
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CHAPTER 9
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CONTROL, SECURITY AND AUDIT 
 
263 
The main effect of 
big data
and 
data analytics
on the work of auditors is that their focus is shifting 
towards validating controls within the accounting software and on interpreting data rather on the 
verification of transactions and traditional control tests. Big data and data analytics also allow an 
organisation to improve its effectiveness and efficiency in terms of reducing the amount of time it takes 
to do accounting and audit work, which in turn reduces fess for clients and provides greater assurance 
over the work performed. 
7.2.3 Distributed ledger technology (Blockchain)
Distributed ledger technology
(also known as 
Blockchain
) is a technology that eliminates the need for 
data and information to be stored and managed centrally. Furthermore, this technology allows an 
accurate, up-to-date, single, trusted and transparent record to be shared between numerous 
organisations. The concept of Blockchain is best explained through its practical uses.
EXAMPLE 
The diamond industry uses a Blockchain system named Everledger to help prevent fraud and the 
transfer of stolen goods. All diamonds have unique characteristics (similar to how humans have 
individual fingerprints). The Everledger system creates an identity for every diamond by recording these 
unique characteristics. Every time a diamond is brought or sold, the sale is recorded by the system on 
the Blockchain so that the diamond’s ownership can be traced.
Another example is in relation to the cryptocurrency Bitcoin. Bitcoins are created by individuals or 
organisations processing data and solving problems (known as mining). Once mined, Bitcoins become 
the property of the miner and can be traded or transferred. Every transaction is recorded on a 
Blockchain. The Blockchain stores the transaction history of all Bitcoins, enabling the assurance that 
only legitimate owners of Bitcoins can spend or transfer them. It also prevents Bitcoins being copied or 
being illegally generated.