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Announcing a New Textbook on Business Analytics and Essential Statistics for Auditors and Certified Public Accountants

Information technology plays a pivotal role in financial control and audit: most if not all financial data is now digitally recorded, and dispersed among servers, clouds and networks of computers over which the audited firm has no control. Additionally, firm data - particularly in finance, software, insurance and biotech firms - comprises most of the audited value of the firm. Financial audits are critical mechanisms ensuring the integrity of information systems and the reporting of organizational finances. They help avoid the abuses that led to passage of legislation such as the Foreign Corrupt Practices Act, and the Sarbanes-Oxley Act. Unfortunately, audit effectiveness has declined over the past two decades as auditor skillsets have failed to keep up with advances in information technology. Information and communications technology lie at the core of commerce today and are integrated in business processes around the world. This book is designed to meet the increasing need of audit professionals to understand information technology and the controls required to manage it. This course is designed to meet the evolving needs of audit professionals in understanding information technology and the controls required to manage it

Why is this important now?

Auditing has become more complex because of the Sarbanes-Oxley Act of 2002 and the expansion of cloud-based storage and processing of corporate accounting data. This has shifted the focus of audits from substantive testing to compliance tests (which require completely different testing approaches and objectives). None of the existing books address the audit firms’ sampling and analysis problems c. 2018

About this Text

This book addresses the need for a text that steps through the accounting and audit process, with its stylized vocabulary and policies and procedures that are highly regulated and steeped in historical precedent. Sadly, there hasn’t been a proper text published since the 1990s on data analytics and statistics specifically addressing the public accounting industry (the CPA’s job). Yet this industry is huge (each of the Big 4 audit firms employs around 200,000 people. Additionally, the educational market is huge, with a course in audit analytics being taught in nearly all major business and accounting programs.

After reading this book

Readers will understand how evidence is acquired using software and audit plans to acquire and manipulate data

Readers will learn to build a Risk Assessment Matrix and use it to build audit programs and interpret findings

Readers will learn hands-on how to use software for Use, Extraction, and Manipulation of account data

Readers will learn how to set Materiality and Tolerable Errors in Audits, including the legal, statistical, and practical interpretation

Readers will learn how to use existing evidence to construct the Sarbanes-Oxley report which management will sign.

Skills expected of the minimally-qualified reader

I am assuming that they have a basic statistics course (distributions and hypothesis testing) and that they have a basic knowledge of R. A particular advantage of R is that it is open-source / free, which makes it much easier to assign for classes.

Having some knowledge of financial accounting structure and operations would help, though I cover this in the early chapters of the book, to be able to explain some of audits more idiosyncratic concepts and terms.

What are the typical job roles and experience level for the primary reader? Entry level accountant, CPA or audit para-professional (there are many of these living in India and the Philippines who handle outsourced auditing work for the Big 4).

About the Author

J. Christopher Westland is Professor in the Department of Information & Decision Sciences at the University of Illinois. He is a licensed Certified Public Accountant in Illinois. He holds a BA in Statistics and an MBA in Accounting from Kelley School of Business at Indiana University.. He received his PhD in Computers and Information Systems from the University of Michigan. Dr Westland has professional experience in the US as an expert witness in patent law, accounting and as a consultant in new technology valuation in the US, Europe, Latin America and Asia. Dr. Westland has consulted, taught and conducted academic research into the economic value of innovation and strategies for intellectual property protection. Dr. Westland is the author of numerous academic papers and of seven books: Financial Dynamics (Wiley 2003); Valuing Technology (Wiley 2002); Global Electronic Commerce (MIT Press 2000); Red Wired: China’s Internet Revolution (Marshall Cavendish, 2010); Structural Equation Modeling (Springer 2015; 2nd ed. 2018); Audit Analytics (Creative Commons, 2019) and Global Innovation Management (Palgrave Macmillan 2008; 2nd ed. Springer/Palgrave 2017) which is the most widely adopted European innovation text. He is currently Editor-in-chief of Electronic Commerce Research (Springer) and has served on the editorial boards of Management Science, ISR, IJEC, SSRN, and other scholarly journals. Dr. Westland is fluent in Mandarin and has served on the faculties at Tsinghua University, Harbin Institute of Technology, Chinese University of Science and Technology, Nanyang Technological University, University of Michigan, University of Southern California, Hong Kong University of Science and Technology and other academic institutions. Dr Westland has advised on valuation and technology strategy for Microsoft, Intel, Motorola, V-Tech, Aerospace Corporation, IBM, Pacific Bell, and other technology firms.


James Christopher “Chris” Westland, PhD, CPA Professor , Department of Information & Decision Sciences (MC 294) Room 2400, University Hall, University of Illinois - Chicago 601 S. Morgan Street, Chicago, IL 60607-7124 Tel: (312) 996 2323 Email Web

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