THE APPLICATION OF DATA VISUALIZATION IN AUDITING By ABDULLAH ALAWADHI A ...

185 Pages·2015·6.89 MB·English

THE APPLICATION OF DATA VISUALIZATION IN AUDITING
By
ABDULLAH ALAWADHI

A dissertation submitted to the
Graduate School- Newark
Rutgers, The State University of New Jersey
in partial fulfillment of requirements
for the degree of
Doctor of Philosophy
Graduate Program in Management
Written under the direction of
Professor Miklos A. Vasarhelyi
and approved by

_________________________
Professor Miklos A. Vasarhelyi
________________________
Professor Michael Alles
________________________
Professor Helen Brown
_________________________
Professor Asli Basoglu

Newark, New Jersey
May, 2015
© Copyright 2015
Abdullah Alawadhi
ALL RIGHTS RESERVED
Abstract of the Dissertation
The Application of Data Visualization in Auditing
By Abdullah Alawadhi
Dissertation Chairman: Prof. Miklos A. Vasarhelyi

Albert Einstein once wrote, "My particular ability does not lie in mathematical
calculation, but rather in visualizing effects, possibilities, and consequences." Today, the
web, cloud, virtual reality, enterprise resource planning (ERP) systems and other evolving
technologies are increasing the stream of data in all areas, thus the need for “visualizing
effects, possibilities, and consequences", is necessary to reduce the volume to a
manageable size and focus on those crucial data points.
With the advent of such “Big Data”, businesses are now so overwhelmed by these
data cascading into and through their business operations. They are faced with major
challenges in processing and analyzing data. Furthermore, auditors will need to rely on
more advance techniques throughout the audit cycle since traditional techniques are
becoming less and less effective and efficient in the Big Data environment.
Data visualization is one solution that presents information in ways that engages
the use of the human’s cognitive and visual abilities. It is the process of converting raw
data into some visual form. It helps by shifting the cognitive load coupled with the
understanding of Big Data, to the human perceptual system through graphics and visuals.
Data visualization helps auditors gain better insights, draw better conclusions and
ultimately improve the audit process.
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This dissertation will contribute to the existing literature by exploring the
application of various data visualization techniques in auditing. Despite being widely used
in other fields such as medicine and engineering, the auditing profession has been behind
in their usage of data visualization, and this dissertation will attempt to bridge this gap.
Specifically, it will look into and analyze the existing literature and their usage of data
visualization techniques to shed light and understand its current evolution and its future
trend. It will also contribute by providing two illustrations of how exploratory and
explanatory data visualization can be applied in the audit profession. The first will
demonstrate how it can be applied in the audit planning stage, where little is known about
the data. The second will illustrate how an expert visual dashboard can be applied in the
area of procurement cards for the purpose of audit monitoring and control.
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ACKNOWLEDGMENTS

It is my great pleasure to thank the many people who have made this dissertation
possible. It is difficult to overstate my gratitude to my mentor and Ph.D. advisor, Dr.
Miklos Vasarhelyi. His encouragement and support during my Ph.D. study at Rutgers
University helped me complete this dissertation. His enthusiasm, inspiration, and critiques
helped me become a better researcher.
I would also like to gratefully acknowledge the contributions and guidance of my
dissertation committee members, Dr. Michael Alles for his insightful feedback and open
door policy, Dr. Helen Brown-Liburd for her supportive words and advice, and Dr Asli
Basoglu for her appreciative comments and guidance.
I am indebted to my many colleagues and friends for providing helpful comments
and a stimulating environment in which to learn and grow. Particularly, Deniz Applebaum
and Paul Byrnes for their participation and feedback during data collection and analysis,
and Dr. Hussain Issa for his passionate support and help during my research. I would also
like to thank Lisa Koors for giving her time and effort during the knowledge elicitation
phase.
I also wish to thank my entire family for providing love, support, and
encouragement throughout my academic years, specifically my mother and father who
raised me, supported me, taught me, and loved me.
Lastly, and most importantly I would like to give great acknowledgement,
appreciation, and thanks to my lovely wife Moneera Altawari, who stood beside me and
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supported me throughout my studies. I will never forget the sacrifices she made on behalf
of my education and career.
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TABLE OF CONTENTS

Abstract of the Dissertation ...................................................................................... ii
ACKNOWLEDGMENTS .........................................................................................iv
TABLE OF CONTENTS ..........................................................................................vi
LIST OF TABLES .................................................................................................... x
LIST OF ILLUSTRATIONS .................................................................................... xi
CHAPTER 1: INTRODUCTION.......................................................................... - 1 -
1.1 INTRODUCTION ............................................................................................................. - 1 -
1.2. INFORMATION OVERLOAD AND HUMAN INFORMATION PROCESSING ........ - 2 -
1.3. DATA VISUALIZAION .................................................................................................. - 5 -
1.4. MOTIVATION AND CONTRIBUTION ........................................................................ - 7 -
CHAPTER 2: DATA VISUALIZATION, ITS EVOLUTION AND USAGE AND
RESEARCH IN AUDITING: A LITERATURE ANALYSIS ............................... - 9 -
2.1 INTRODUCTION ............................................................................................................. - 9 -
2.2. VISUAL CUES AND TYPES OF DATA VISUALIZATION ...................................... - 12 -
2.3. THE EVOLUTION OF DATA VISUALIZATION ....................................................... - 21 -
2.4. DATA VISUALIZATION IN AUDITING .................................................................... - 28 -
2.4.1 Visual Literature Analysis of Data Visualization Research in Auditing ..................- 30 -
2.5. DISCUSSION AND CONCLUSION ............................................................................. - 35 -
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CHAPTER 3: THE APPLICATION OF DATA VISUALIZATION IN MEDICARE
HEALTH INSURANCE FOR THE PURPOSE OF KNOWLEDGE DISCOVERY
AND COMMUNCATION................................................................................... - 37 -
3.1. INTRODUCTION .......................................................................................................... - 37 -
3.1.1. The Medicare Healthcare Program ..........................................................................- 37 -
3.1.2. Data Visualization for Knowledge Discovery in Auditing ......................................- 38 -
3.2. METHODOLOGY ......................................................................................................... - 42 -
3.3. DATA ............................................................................................................................. - 46 -
3.4. ANALYSIS AND DISCUSSION ................................................................................... - 49 -
3.4.1. Tabular Statistics and Basic Graphs .........................................................................- 49 -
3.4.2. Descriptive Visual Dashboards ................................................................................- 60 -
3.4.3. In-Depth Analysis and Advanced Visuals ...............................................................- 68 -
3.5. DISCUSSION OF RESULTS ......................................................................................... - 85 -
3.5.1. Discussion on Results ..............................................................................................- 85 -
3.5.1. Discussion on Methodology.....................................................................................- 87 -
3.6. CONCLUSION ............................................................................................................... - 89 -
CHAPTER 4: EXPERT KNOWLEDGE ELICITATIONS IN A PROCUREMENT
CARD CONTEXT: A VISUAL DASHBOARD .................................................. - 90 -
4.1. INTRODUCTION .......................................................................................................... - 90 -
4.1.1. Computer Assisted Audit Techniques (CAATS) .....................................................- 91 -
4.1.2. Expert Systems .........................................................................................................- 93 -
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4.1.3.. The Visual Dashboard .............................................................................................- 97 -
4.2. THE DATA ................................................................................................................... - 102 -
4.2.1. Procurement Cards ................................................................................................. - 102 -
4.2.2. The Data ................................................................................................................. - 103 -
4.2.3. The Procurement Card Process .............................................................................. - 104 -
4.3. THE METHODOLOGY ............................................................................................... - 106 -
4.4. ANALYSIS AND RESULTS ....................................................................................... - 109 -
4.4.1. Initial CAAT Tests ................................................................................................. - 109 -
4.4.2. Knowledge Base Construction ............................................................................... - 112 -
4.4.3. The Visual Dashboard ............................................................................................ - 118 -
4.4.4. Results .................................................................................................................... - 120 -
4.5. DISCUSSION & CONCLUSION ................................................................................ - 121 -
CHAPTER 5: DISCUSSION AND CONCLUSION........................................... - 123 -
5.1. GENERAL DISCUSSION ........................................................................................... - 123 -
5.2. CONCLUSION, LIMITATIONS AND FUTURE RESEARCH ................................. - 127 -
5.2.1. Limitations ............................................................................................................. - 131 -
5.2.1. Future Work ........................................................................................................... - 132 -
REFERENCES .................................................................................................. - 135 -
APPENDIX A .................................................................................................... - 154 -
APPENDIX B ..................................................................................................... - 162 -
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APPENDIX C .................................................................................................... - 164 -
APPENDIX D .................................................................................................... - 165 -
APPENDIX E ..................................................................................................... - 167 -
APPENDIX F ..................................................................................................... - 168 -
APPENDIX G .................................................................................................... - 169 -

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