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

See all articles by Marc Eulerich

Marc Eulerich

University of Duisburg-Essen, Mercator School of Management

Adi Masli

University of Arkansas - Sam M. Walton College of Business

Jeffrey S. Pickerd

University of Mississippi

David A. Wood

Brigham Young University - School of Accountancy

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

Eulerich, Marc and Masli, Adi and Pickerd, Jeffrey Scott and Wood, David A., The Impact of Audit Technology on Audit Task Outcomes: Evidence for Technology-Based Audit Techniques (October 13, 2022). Available at SSRN: https://ssrn.com/abstract=3444119 or http://dx.doi.org/10.2139/ssrn.3444119

Marc Eulerich (Contact Author)

University of Duisburg-Essen, Mercator School of Management ( email )

Lotharstrasse 65
Duisburg, 47057
Germany
00492033792600 (Phone)

HOME PAGE: http://www.msm.uni-due.de/ircg

Adi Masli

University of Arkansas - Sam M. Walton College of Business ( email )

Fayetteville, AR 72701
United States

Jeffrey Scott Pickerd

University of Mississippi ( email )

David A. Wood

Brigham Young University - School of Accountancy ( email )

518 TNRB
Brigham Young University
Provo, UT 84602
United States
801-422-8642 (Phone)
801-422-0621 (Fax)

HOME PAGE: http://marriottschool.byu.edu/employee/employee.cfm?emp=daw44

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