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
Date Written: December 29, 2005
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: Suggested Citation