Application of Data Envelopment Analysis in Auditing

United States Patent Application Publication, Pub. No.:US 2005/0288980A1, Pub. Date: December 29, 2005.

Posted: 2 Jan 2019

See all articles by Ehsan H. Feroz

Ehsan H. Feroz

University of Washington, Milgard School of Business-Accounting ; University of Illinois at Urbana-Champaign; Government of the United States of America - US GAO Advisory Council; University of Minnesota, Labovitz School of Business-Department of Accounting; University of Minnesota, Carlson School of Management-Department of Accounting; American Accounting Association

Sungsoo Kim

Rutgers Business School - Camden

Raymond L. Raab

University of Minnesota, Duluth - Labovitz School of Business and Economics (LSBE)

Date Written: December 29, 2005

Abstract

A data processing procedure, DEA (Data Envelopment Analysis) is described as as an analytical tool in audit engagement. DEA receives data inputs from from financial statements of a plurality of clients, constructs efficiency frontiers and evaluates relative income efficiencies. DEA can be used in the overall review stage to detect any anomalies and to assess the reasonableness of financial statements. Application of DEA can significantly minimize errors in an audit judgment by providing accurate and reliable benchmarks and red flags at a reasonable low cost.

Note: Also see, Feroz, Kim and Raab, "Analytical Procedures: A Data Envelopment Analysis Approach" (2005).

Keywords: Patent, DEA, Analytics, Income Efficiency, Input-Output Models, Financial Statements, Efficiency, Audit, Red Flags, Risk Management, Capital Markets, SEC, PCAOB

JEL Classification: C44, C61, C67, D61, G14, G30, M11, M40, M41, M49

Suggested Citation

Feroz, Ehsan H. and Kim, Sungsoo and Raab, Raymond L., Application of Data Envelopment Analysis in Auditing (December 29, 2005). United States Patent Application Publication, Pub. No.:US 2005/0288980A1, Pub. Date: December 29, 2005.. Available at SSRN: https://ssrn.com/abstract=3292770

Ehsan H. Feroz (Contact Author)

University of Washington, Milgard School of Business-Accounting ( email )

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University of Illinois at Urbana-Champaign ( email )

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Government of the United States of America - US GAO Advisory Council ( email )

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University of Minnesota, Labovitz School of Business-Department of Accounting ( email )

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University of Minnesota, Carlson School of Management-Department of Accounting ( email )

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American Accounting Association ( email )

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Sungsoo Kim

Rutgers Business School - Camden ( email )

227 Penn Street
Camden, NJ 08102
United States
856-225-6584 (Phone)

Raymond L. Raab

University of Minnesota, Duluth - Labovitz School of Business and Economics (LSBE) ( email )

412 Library Drive
Duluth, MN 55812-3029
United States

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