One Team or Two Teams? Exploring the Existence of a Collective Audit Team Identity between Auditors and IT Specialists and its Implications on Audit Process and Outcomes

Abstract

While prior research focuses on the hierarchical audit team comprised of auditors, we focus on the collective audit team comprised of auditors and information technology (IT) specialists. The motivation for understanding this collective audit team comes from complex systems in today’s audits and concerns from researchers and regulators regarding ineffective communication and coordination between the two specializations. Specifically, we investigate how relationships between auditors and IT specialists are perceived and what these relationships mean for the audit. Results of interviews conducted with Big 4 audit and IT practitioners provide evidence that relationship quality between the two is perceived to primarily depend on communication and mutual trust and respect. Auditors assert a one-team view of the collective audit team that includes IT specialists but IT specialists feel auditors see them as a separate team and a “necessary evil.” The audit process vastly differs between relationships perceived as difficult and good. Difficult relationships appear to have less widespread IT specialist involvement and less collaboration when modifying audit procedures given unexpected IT issues. These findings imply audit teams with difficult relationships may be at risk of poor integration, insufficient testing, and unsupported reliance on IT functions, shedding light on recurring threats to audit quality identified by PCAOB inspections. In good relationships, auditors and IT specialists appear motivated to interact often and work together to reduce knowledge gaps and complete the audit. Inferences gleaned from good relationships allow us to highlight potential prescriptions for audit firms to improve the effectiveness of collective audit teams.