PBESProceedings of Business and Economic Studies2209-26412209-265XBio-Byword Scientific Publishing Pty. Ltd.10.26689/pbes.v7i5.8336ArticleResearch on Audit Risks in the Recognition of Data Assets on Financial Statementshttps://artdesignp.com/journal/PBES/7/5/10.26689/pbes.v7i5.8336XiaoXia2024752024-10-24This paper explores the audit risks associated with the recognition of data assets on financial statements, focusing on the complexities arising from their replicability, unique valuation patterns, and contextual dependencies. It identifies major misstatement risks at both the financial statement and assertion levels, including the potential for management to exaggerate data asset values, uncertainties in valuation methods, and deficiencies in data governance and internal controls. Additionally, auditors’ lack of professional knowledge and inappropriate audit methods can lead to inspection risks. The paper emphasizes the urgent need for enhanced accounting standards for data assets, effective guidelines for their recognition and measurement, and robust internal controls. Furthermore, it advocates for the exploration of effective valuation methods and the incorporation of advanced technologies, such as big data and AI, into auditing practices. By improving auditor training and methodologies, organizations can better manage the inherent risks associated with data asset auditing.

Birch K, Cochrane D, Ward C, 2021, Data as Asset? The Measurement, Governance, and Valuation of Digital Personal Data by Big Tech. Big Data & Society, 8(1). https://doi.org/10.1177/20539517211017308

Huang SZ, Ye FY, Chen CL, 2023, Recognition, Measurement, and Reporting of Data Assets: A Business Model Perspective. Finance & Accounting Monthly, 2023(8): 3–7.

Yuan ZM, Yu X, Li M, 2022, Data Asset Information Disclosure, Heterogeneity of Institutional Investors, and Corporate Value. Modern Finance (Journal of Tianjin University of Finance and Economics), 2022(11): 32–47.

The Chinese Ministry of Finance, 2023, Interim Provisions on Accounting Treatment of Enterprise Data Resources, viewed September 1, 2024, https://www.gov.cn/gongbao/2023/issue_10746/202310/content_6907744.html

Zhu JJ, Liu Y, Xu ZY, 2024, Exploring the Risks of Recognizing Data Resources as Assets in Financial Statements. Finance & Accounting Communications, 2024(13): 91–96.

Liao YF, Luo CH, 2024, Challenges and Responses in Auditing Data Assets for Financial Statements. Finance & Accounting Communications, 2024(21): 7–13.

Hannila H, Silvola R, Harkonen J, et al., 2019, Data-driven Begins with DATA; Potential of Data Assets. Journal of Computer Information Systems, 62(1): 29–38. https://doi.org/10.1080/08874417.2019.1683782

China Academy of Information and Communications Technology, 2020, Data Assetization: Research Report on Data Asset Recognition and Accounting Measurement (2020), viewed August 23, 2023, http://www.caict.ac.cn/kxyj/qwfb/ztbg/202012/P020201209374734599565.pdf

Luo M, Li JP, Tang K, 2023, Data Assetization in Enterprises: Accounting Recognition and Value Assessment. Tsinghua Journal of Philosophy and Social Sciences, 2023(5): 195–209.

Li Y, Liu Y, Li BY, 2022, Analysis of Several Theoretical Issues in the Accounting of Data Assets. Statistical Research, 2022(9): 19–28.

Lu WW, Gou TJ, 2023, Theoretical Logic and Practical Approach of Assetization of Data Elements: Based on the Understanding of the Connotation and Value Law of Data Assets. Enterprise Economy, 2023(4): 28–39.

Niu B, Yu X, Yuan Z, et al., 2024, Data Asset Disclosure and Auditor Pricing Strategies. Contemporary Finance & Economics, 2024(2): 154-164.

Zhang XM, Jin Y, 2022, Reconstruction of the Balance Sheet: A Study on Corporate Behavior in the Digital Economy Era. Management World, 2022(9): 157–175.

European Financial Reporting Advisory Group (EFRAG), 2021, Discussion Paper – Better Information on Intangibles: Which is the Best Way to Go?, viewed September 1, 2024, https://www.efrag.org/sites/default/files/2023-11/Better%20information%20on%20intangibles%20-%20which%20is%20the%20best%20way%20to%20go.pdf

Zhang JR, Gao LB, Wei YL, 2023, Accounting for Data Assets: Concept Evolution, Deconstruction, and Relationship Analysis. Accounting Friends, 2023(24): 131–137.

Wilson RMS, Stenson JA, 2008, Valuation of Information Assets on the Balance Sheet: The Recognition and Approaches to the Valuation of Intangible Assets. Business Information Review, 25(3): 167–182. https://doi.org/10.1177/0266382108095039

Zhao X, Li XQ, 2024, Considerations and Advancement Approaches for the Inclusion of Data Assets in Financial Statements. Finance & Accounting Monthly, 2024(1): 1–6.

Long WC, 2024, Analysis of Audit Risks for Data Assets. International Business and Finance Accounting, 2024(11): 74–77.

Wang WY, Zhang HM, Zhang M, 2024, The Impact of Data Asset Disclosure on Debt Financing Costs in Manufacturing Enterprises. Financial Observation, 2024(2): 38–50.

Moody DL, Walsh P, 1999, Measuring the Value of Information – An Asset Valuation Approach. European Conference on Information Systems, 1999: 496–512.