Work

Emerging Technologies in External Audit and How They Are Challenging Auditors' Judgements and Decision‐Making Processes

Year: 2025

Type: article

Abstract: ABSTRACT This study investigates how external auditors use heuristics to resolve complex audit matters when using audit data analytics (ADA). The use of ADA technologies, tools, and applications has led to the emergence of many challenges for the auditing profession, including those related to cognitive heuristics and auditor skills. Verbal protocol analysis and follow‐up interviews with the same 20 participants are methods used to collect data for this exploratory study. Our findings revealed that being overly reliant on easily obtainable information produced from ADA technologies can result in a loss of audit objectivity. The potential consequences include a decline in the quality of an external auditor's assessments and a potential decrease in the overall efficacy of the audit. We report the tendency of auditors to rely on the recollection heuristic, while utilising ADA technologies can be mostly attributed to their limited understanding of these ADA technologies, tools, and applications. Our analysis of participants' responses indicates that, despite the potential advantages of ADA, they preferred simpler programs like Microsoft Excel.

Source: Accounting and Finance

DOI: 10.1111/acfi.70043

Authors: Mohammed Alsaif, Duc Hong Thi Phan, Michael Kend, Mona Alharbi

Institutions: Najran University, RMIT University, King Abdulaziz University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,470

Funder: RMIT University