Benefits and challenges of applying data analytics in government auditing

Abstract

Purpose: This study seeks to assess how data analytics (DA) can be implemented within the scope of Maltese external public sector audits in order to enhance the value obtained from these audits. We herein explore the use of descriptive, diagnostic, predictive and prescriptive DA within Malta’s National Audit Office (NAO).

Methodology: The research follows a mixed methodology approach. Empirical evidence was gathered through the conduct of semistructured interviews and the distribution of questionnaires to NAO auditors across all audit units.

Findings: The findings indicate that that while the NAO has started to integrate DA in its operations, the use of DA by the Office is still limited. The study suggests that all units across the NAO stand to benefit from the implementation of DA. In order for the NAO to take advantage of DA, the Office should fully commit to making the necessary investments to prepare for the future of auditing. Additionally, a DA strategy, which maps out the direction the NAO intends to take, should be drawn up, addressing the immediatie, medium and long-term. Training for NAO auditors is also key for addressing any lack of expertise in this area.

Originality/Value: The study aims to shed light on how Supreme Audit Institutions can incorporate DA into their operations, in order to increase the efficiency, effectiveness as well as the level of insights gained from the audits they carry out.