Readings week 3

Question 1

Process mining auditors are used for: (3) (Aalst, 2010)

Answer 1

1. Discover processes
2. Check conformance
3. Model extension

Question 2

Process mining based auditing uses 3 different strategies: (Aalst, 2010)

Answer 2

1. Use historical data: here you try to answer ad hoc questions using data from the past
2. Auditing using models only: compare models
3. Use current data: audit in real time, while the processes are ongoing

Question 3

Issues with using process mining in auditing: (4) (Aalst, 2010)

Answer 3

• Auditor may lose independence if they start giving advice based on current data
• Data might be hard to get in one place
• Looking at all of the data will raise more flags and require more effort (increasing costs)
• It creates a need for new accounting methodologies

Question 4

What is the goal of process mining according to Jans, Alles, Vasarhelyi (2013) ?

Answer 4

To extract knowledge from the event logs maintained by a company’s ERP system

Question 5

How does process mining add value in auditing? Jans et al (2013

Answer 5

• Process mining analyses the entire data population and not just a sample
• That data consists of meta-data, data entered independently of the actions of the auditee (so not just data entered by the auditee)
• It allows the auditor to have a more effective way of implementing the audit risk model
• It allows the auditor to conduct analyses which are not possible by using conventional tools. (see process actually being carried out in practice, see social relationships between individuals)

Question 6

Two issues that make process mining difficult in auditing: (Jans et al, 2013)

Answer 6

1. Not all data is stored

2. The data you want to analyse might be scattered across the IT system

Question 7

5 approaches to process mining (Jans et al, 2013)

Answer 7

1. Process discovery: how are business processes actually carried out?
2. Conformance check: does the process reality match with the expectation or a standard?
3. Performance analysis: measure business process performance
4. Social networks analysis: shows the social networks and social relationships between employees
5. Decision mining and verification: analyse the decision points in a process