Performing Tests of Internal Controls Using Process Mining

What Could Go Wrong?

Tiffany Chiu, PhD, Helen L. Brown-Liburd, PhD, CPA (inactive), and Miklos A. Vasarhelyi, PhD

Process mining provides a new approach to gathering audit evidence by automatically analyzing the entire population of event logs recorded in a company's IT system. In other words, the company's business processes and the actions taken by its employees are chronologically captured in the event log for analysis. This article aims to explain how auditors can use process mining in the audit process, especially in tests of internal controls over financial reporting. Specifically, the authors use the procure-to-pay cycle as an example of how analysis of event logs provides auditors with unique information that can assist in such tests.