The Impact of Audit Technology on Audit Task Outcomes: Evidence for Technology-Based Audit Techniques
55 Pages Posted: 4 Sep 2019 Last revised: 13 Oct 2022
Date Written: October 13, 2022
Abstract
We use two surveys and interviews of individual auditors and chief audit executives (CAE) to examine their perceptions of technology-based audit techniques (TBATs). Auditors perceive TBATs as beneficial. Specifically, a one standard deviation increase in the use of TBATs is associated with completing 18.5 percent more audits, finding 10.8 percent more risk factors, providing 12.3 percent more recommendations, and decreasing audit days by 13.5 percent. However, CAEs also perceive TBATs as costly. A one standard deviation increase in the use of TBATs is associated with a 15.5 increase in the size of the internal audit function. Finally, interviews with CAEs suggest that TBATs are not used more often because of difficulties in quantifying TBATs’ benefits, observing TBATs’ benefits in a timely manner, and hiring auditors with appropriate skills. Overall, TBATs stand to increase the efficiency and effectiveness of audit tasks, but auditors struggle to quantify their net cost-benefit tradeoff.
Keywords: Technology, Internal Audit, Data Analytics, Auditing, Technology-Based Audit Techniques
JEL Classification: M40, M42, G34, G32, M4, G3
Suggested Citation: Suggested Citation