Information Technology in an Audit Context: Have the Big 4 Lost Their Advantage?

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Date
2017-01-01
Authors
Lowe, D. Jordan
Bierstaker, James
Janvrin, Diane
Jenkins, J. Gregory
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Altmetrics
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Accounting
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Abstract

Audit firms use information technology (IT) to improve audit quality, effectiveness, and efficiency. While audit IT has evolved over the past decade, limited guidance is available to assist practitioners in determining how IT can be used. Our research objectives are fourfold. First, we examine to what extent auditors use and assess the perceived importance of IT in their audits. Second, we look at different-sized firms to determine whether IT adoption and implementation decisions differ by firm size. Third, we investigate changes in auditors' use and perceived importance of IT over the past decade. Fourth, we examine whether IT has impacted the communication modes used by auditors when reviewing workpapers and fraud brainstorming. Overall, Big 4 auditors were not significantly more likely to use IT than non-Big 4 auditors, suggesting that the dominance of the Big 4 firms' use of IT has lessened. In fact, there are a few applications where non-Big 4 auditors appear to have taken the lead. In addition, our findings indicate that auditors have increased the use of all the IT applications we examined ten years ago. However, we find evidence that auditors may prefer to use even more IT in their audits than they are currently using.

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This accepted article is published as Lowe, J., J. Bierstaker, D. Janvrin, and G. Jenkins. 2018. Information Technology in an Audit Context: Have the Big 4 Lost Their Advantage? Journal of Information Systems 32 (1): 87-107. DOI: 10.2308/isys-51794 Posted with permission.

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