An Exploration of Bank Confirmation Process Automation: A Longitudinal Study

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Date
2020-10-14
Authors
Caster, Paul
Elder, Randal
Janvrin, Diane
Janvrin, Diane
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Accounting
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Accounting
Abstract

This exploratory study examines automation of the bank confirmation process using longitudinal data set from the largest third-party U.S. confirmation service provider supplemented with informal interviews with practitioners. We find a significant increase in electronic confirmation use in the U.S. and internationally. Errors requiring reconfirmation were less than two percent of all electronic confirmations. Errors made by auditors were almost five times more likely than errors by bank employees. Most auditor errors involved use of an invalid account number, although invalid client contact, invalid request, and invalid company name errors increased recently. Big 4 auditors made significantly more confirmation errors than did auditors at non-Big 4 national firms. Error rates and error types do not vary between confirmations initiated in the U.S. and those initiated internationally. Three themes emerged for future research: authentication of evidence, global differences in technology use, and technology adoption across firms of different sizes.

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This accepted article is published as Caster, P., R. J. Elder, and D. J. Janvrin. An Exploration of Bank Confirmation Process Automation: A Longitudinal Study, Journal of Information Systems, October 14 2020 ISYS-19-038. doi: 10.2308/ISYS-19-038. Posted with permission.

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