A Novel Full‐Chain Loop Tracking Auditing Framework for Obtaining Audit Evidence With Reasonable Assurance

ABSTRACT As an attestation engagement, auditing is required to provide reasonable assurance for its conclusions. Traditional auditing has limited capacity to handle unstructured data and is usually based on audit sampling techniques, which can lead to the neglect of important audit evidence during the auditing process and result in a higher audit risk, making the assurance level uncontrollably guaranteed. Meanwhile, the nature of attestation risk, which is characterised by multi‐factor triggering chain transmission and time evolution, brings difficulties to the acquisition of critical audit evidence. Therefore, this paper realizes the Full‐chain Loop Tracking Audit through the business cycle audit process of ‘Obtaining Evidence of Internal Sequential Timing Audit—Obtaining Evidence of Horizontal Expansion of Audit Matters—Penetrating the Multi‐Dimensional Evidence Association Rules—Achieving the Anchor Point at The Reasonable Assurance Level’. This is called the Full‐chain Loop Tracking Auditing framework (FcLTA framework). Firstly, ‘Obtaining Evidence of Internal Sequential Timing Audit’ is a process of identifying and obtaining abnormal trends in accounting book facts. This process obtains ‘Time Series Audit Evidence’ by embedding the time characteristics of audit evidence in the risk feature vector within the table. Secondly, ‘Obtaining Evidence of Horizontal Expansion of Audit Matters' is a ‘Triangular Verification’, system constructed by integrating financial, business and public opinion data. This process provides ‘Horizontal Expansion Audit Evidence’ by identifying isolated risk signals in financial information to address issues such as discrepancies between accounts and reality and performance whitewashing. Thirdly, ‘Penetrating the Multi‐Dimensional Evidence Association Rules' is a process of integrating audit evidence and resolving conflicts. This process generates ‘Multi‐Dimensional Penetration Audit Evidence Chain’ by constructing a high‐order association across modalities and dimensions for verifying risks. Finally, ‘Achieving the Anchor Point at The Reasonable Assurance Level’ is a testing process for detecting risks with the goal of obtaining high‐level assurance of audit evidence. It mainly includes two processes: predicting the level of audit assurance and determining whether to continue the audit. This paper has implemented the full‐chain circular tracking audit through the FcLTA framework, and the generated audit evidence can meet the high‐level assurance requirements of the attestation engagements, reducing the risk of audit failure.