Effect of Computer Assisted Audit Tools on Corporate Sustainability

António Samagaio,Tiago Andrade Diogo

doi:10.3390/su14020705

Abstract

The literature is fertile in studies that examine the determinants of internal and external auditors’ adoption of computer-assisted audit tools and techniques (CAATs), often ignoring their practical effects on audit quality and organizational performance. This study provides novel evidence on the type of CAATs used by internal auditors, tests the effect of their adoption on corporate sustainability, and explores the moderating effect of organizational characteristics. In this paper, we used data from Portuguese internal auditors collected through a survey, whose research hypotheses were analyzed by the partial least squares–structural equation modeling technique. We found that internal auditors use CAATs moderately in the exercise of their tasks. The results of our study show that there is a strong and positive effect of the use of CAATs by internal auditors on fraud detection in the purchase-to-pay business process, and that the intensity of this relationship is not influenced by the type and size of the entity. This study complements previous research and provides support to practitioners’ decisions that can boost the use of CAATs in internal auditing to make organizations more sustainable.

Highlights

IntroductionThe goals of companies have changed considerably [1], leading to the rise of theories that describe the core corporate objective-shareholder theory developed by Friedman [2] and stakeholder theory developed by Freeman [3]
Effect of Computer Assisted AuditOver the years, the goals of companies have changed considerably [1], leading to the rise of theories that describe the core corporate objective-shareholder theory developed by Friedman [2] and stakeholder theory developed by Freeman [3]
The average use of computer-assisted audit tools and techniques (CAATs) was 3.55, indicating that the use of information technology (IT) in internal audit processes is not very intense (Table 1). This result corroborates the international findings of the Common Body of Knowledge 2015 [98], which found that 52% of internal auditors made no or very little use of CAATs in audit processes and 23% of respondents had a primary reliance on manual systems and processes

Summary

Introduction

The goals of companies have changed considerably [1], leading to the rise of theories that describe the core corporate objective-shareholder theory developed by Friedman [2] and stakeholder theory developed by Freeman [3]. The shareholder theory focuses on financial goals leading to shareholder value maximization, and the stakeholder theory suggests the firm ought to maximize its value with more associated responsibility, creating value for all stakeholders. Zumente and Bistrova [1] warn that sustainability and long-term value creation are the key drivers to a firm’s commitments to its stakeholders. Sustainability represents firms’ commitment/ability to conserve resources, aiming to satisfy current demands as well as those of the future generation [4]. Elkington (p. 20 [5])

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Conclusion