Audit Profession Research Articles

Cloud-based artificial intelligence and audit report: the mediating role of the auditor

Purpose This study aims to elucidate the intricate relationship between cloud-based artificial intelligence (CBAI) and audit reports, specifically emphasizing the mediating role played by auditors. Design/methodology/approach This study used a quantitative approach, distributing 322 questionnaires to external auditors in Jordan to explore the potential enhancements of CBAI in auditing. Convenient random sampling was used to gather data from available members of the population, which comprises external audit offices in Jordan. There are a total of 454 audit offices in Jordan, employing diverse auditors, such as partner-owner auditors, assistant auditors and certified auditors. Data analysis was conducted using SmartPLS software, which uses structural equation modeling. Findings The study’s findings suggest potential cost savings associated with CBAI adoption, streamlined audit processes and increased overall efficiency, thereby boosting audit effectiveness and elevating the quality of audit reports. Moreover, the research observes a change in the role of auditors, with a greater emphasis on analytical and advisory tasks rather than traditional manual procedures. These insights highlight the potential benefits for both auditors and audit clients, underscoring the importance of embracing these technologies to propel the auditing profession forward in the digital era. Originality/value This study contributes insights into the impact of CBAI on the audit profession by acknowledging the shift in auditing techniques from manual to digital technology and emphasizing the benefits of cloud computing in terms of accessibility, flexibility, scalability of storage and use of financial data. It also stresses the use of CBAI technology and highlights its potential for automating and accelerating audit operations, efficiently managing client data and improving the accuracy and reliability of audit reports.

Unleashing the beast: the impact of big data and data analytics on the auditing profession—Evidence from a developing country

This study attempts to obtain an understanding of the impact of adopting big data and data analytics (BD&A) on various dimensions of the audit profession. This study aims to examine the effect of adopting BD&A on the audit process, auditor competence, and audit fees in a developing context, Egypt. It also examines the mediating effect of auditor competence on the association between BD&A, audit process, and audit fees. A questionnaire was developed and distributed among financial auditors, IT/IS auditors, and data analytics specialists working for audit firms with different sizes in Egypt. Responses from 205 audit practitioners were collected. Partial least square structural equation modeling was employed to test the research hypotheses. It was revealed that BD&A has a significant positive impact on the audit process and auditor competence. However, an insignificant association between BD&A and audit fees was found. Also, the results indicated that there is a positive significant relationship between auditor competence and audit process, and between auditor competence and audit fees. The mediation analysis reveals that auditor competence partially mediates the relationship between BD&A and the audit process. This indicates that while BD&A directly enhances the audit process, its full potential is realized when auditors possess advanced competencies. In contrast, the relationship between BD&A and audit fees is fully mediated by auditor competence, reflecting the critical role of skill development in justifying fee adjustments.

Artificial intelligence in financial auditing: improving efficiency and addressing ethical and regulatory challenges

Artificial Intelligence has been increasingly reshaping the face of financial auditing for improved efficiency and effectiveness in fraud detection, serving also to strengthen stakeholder trust. This study examines the impact of adopting AI on audit practices, in terms of effectiveness in improving efficiency, fraud detection, ethical challenges, regulatory barriers, and stakeholder trust. In this paper, 460 professional auditors, accountants, and organizational stakeholders have been analyzed using descriptive statistics, correlation, regression, and structural equation modeling. The results indicate that AI has a positive influence on efficiency, value creation, and fraud detection ability, while positively influencing stakeholder trust in organizations. However, ethical concerns from algorithmic bias to a lack of transparency and regulatory risks associated with compliance through data protection laws are also significant barriers. It thus concludes that AI has a enormous potential in revolutionizing auditing practices, and that addressing these barriers through training, transparent AI models, ethical safeguards, and supportive regulatory frameworks is also very important for its widespread adoption. Recommendations and future research avenues are presented to guide the responsible integration of AI into the auditing profession.

Strategic Recruitment of Civil Servant Candidates at BPK RI: Developing Professional Auditors

This research analyzes the implementation of strategic human resource management (HRM) in the recruitment process of Civil Servant Candidates (CPNS) at the Audit Board of the Republic of Indonesia (BPK RI). This process is designed to address the challenge of the need for highly professional and high-integrity personnel while simultaneously creating new innovations in transparency and accountability in public sector recruitment. This study uses a qualitative approach with a case study method, involving in-depth interviews with relevant officials at the BPK RI Human Resources Bureau and direct observations at the recruitment stages. The research results show that the strategic approach begins with meticulous workforce planning, involving long-term needs projections and formation analysis. Merit-based selection is implemented through the use of e-recruitment technology, including Computer-Assisted Test (CAT) to ensure an objective, transparent, and efficient selection process. Additionally, psychological and psychiatric assessments are conducted to evaluate candidates thoroughly, both in terms of technical competencies and personal attributes such as emotional stability and teamwork abilities. This strategic approach not only ensures alignment between the organization's needs and the candidates' qualifications but also supports the enhancement of HR quality through holistic evaluation. The conclusion of this research is that the implementation of innovative HR strategies can strengthen public trust in the recruitment process and support organizational efficiency. These findings make an important contribution to public sector HR management, while also serving as a reference for improving recruitment practices in other government agencies.

The impact of audit software on quality of audit in Kuwait: Insights from auditors

This research tries to find a relationship between audit quality and audit software, impacted by the latter. In this study, multiple sentiments of audit professionals and finance executives on the relation of audit software and quality of audit in Kuwait are examined where, on the basis of agreed perspectives of professionals, it was found that audit software positively influences audit quality. This particular article tries to extend the previous works and emphasizes on the observation of audit professionals and their perspectives through a well-structured survey and semi-structured interviews. This study is to identify the distinctiveness of the audit industry in Kuwait comparing market size and available inadequate local auditors. The authors try to establish the relationship between audit quality and audit software considering the fact that acceptance of audits software will definitely give a more effective and robust audit process to cover market needs. The paper also considers the auditors’ training and experience as a moderating factor for the adoption and usage of audit software in auditing practices in Kuwait, resulting in useful insights on the effects of the adoption and use of auditing software in enhancing the quality of audit reports as well as suggesting resources for the use of technological developments in auditing practices. Thus, the study contributes to the extant literature on the dynamics for the adoption and usage of computerized systems in auditing practices to improve the quality of audit reports.

Optimizing the Role of the South Sulawesi Inspectorate in Handling Regional Government Supervision Issues to Achieve Transparency and Accountability

This research aims to gain understanding and offer solutions regarding the supervision of the South Sulawesi Provincial Inspectorate in the implementation of regional government. Apart from that, this research also aims to identify factors that influence the essence of Inspectorate supervision in regional government and understand the function of the South Sulawesi Provincial Inspectorate. This type of research uses a combined approach between normative legal research or doctrinal legal research (normative legal research) and empirical legal research or non-doctrinal legal research (socio-legal research). The research results show that the supervision of the South Sulawesi Provincial Inspectorate has not been optimal in the administration of regional government. Factors that influence Inspectorate supervision include institutions, budget and human resources. The Inspectorate's supervisory function through attribution, delegation and mandate has a strong basis, but it is necessary to strengthen regulations which are expected to have an impact on the supervision and evaluation mechanism of the South Sulawesi Provincial Inspectorate. And the recommendation in this research is to strengthen the accountability line of defense in coaching and supervision according to the three lines of defense concept, by optimizing risk management and internal control in regional apparatus organizations. Strengthening regulations to support the institutional independence of the Inspectorate, increasing supervisory budget allocations, as well as a system for recruiting competent, high integrity and professional auditors and strengthening regulations related to the function of the South Sulawesi Provincial Inspectorate and changes from the old paradigm to the new paradigm.

Future Relevance of Innovative Information Technology in External Auditing and the Gap Between the Expertise in Sri Lanka

This study addresses a critical empirical gap by investigating the perceptions of external auditors in Sri Lanka regarding their current expertise and the future relevance such expertise in terms of innovative information technology (IT) in external auditing. The research also assesses whether discrepancies exist between auditors’ current IT capabilities and the expected expertise of emerging IT technologies. Additionally, it explores how specific auditor characteristics influence IT competence and perceptions of future relevance. A structured questionnaire was administered to a sample of 200 external auditors from both Big Four and non-Big Four firms, and the data were analyzed using descriptive and inferential statistical techniques. The findings indicate that while auditors acknowledge the growing importance of IT, a significant gap persists between their existing expertise and the skills required to adopt future IT tools effectively. This gap is most pronounced for advanced technologies such as machine learning, process mining, and robotic process automation. On the other hand, regression analysis highlights that work experience and hierarchical position of external auditors significantly influence IT knowledge and perceptions of relevance. Conversely, demographic factors such as age, gender, education, and firm size did not show a significant impact. The study underscores the need for targeted professional development, particularly for senior auditors, to bridge the technological gap. The results suggest that regulatory and educational bodies should implement strategic initiatives to ensure external auditors are equipped to meet the evolving demands of the audit profession in a rapidly changing technological landscape.

Leveraging technology in internal audit processes for streamlined management and risk oversight

The integration of advanced technologies into internal audit processes has revolutionized organizational management and risk oversight, enabling streamlined, data-driven decision-making. As businesses face increasingly complex regulatory environments and operational risks, traditional audit methods often struggle to keep pace. This paper explores the transformative role of emerging technologies, including data analytics, artificial intelligence (AI), robotic process automation (RPA), and blockchain, in enhancing internal audit efficiency, accuracy, and transparency. By automating repetitive tasks, RPA reduces audit cycle times and minimizes human errors, allowing auditors to focus on value-adding activities. AI and machine learning algorithms enable predictive risk analysis, anomaly detection, and real-time monitoring, strengthening an organization’s ability to identify and mitigate risks proactively. Additionally, data analytics tools facilitate comprehensive assessments of large datasets, uncovering patterns and insights that would otherwise go undetected in manual audits. The paper also examines the role of blockchain technology in fostering transparency and accountability through secure, tamper-proof audit trails. Despite the benefits, the adoption of these technologies presents challenges, including integration costs, skill gaps, and data privacy concerns. Addressing these challenges requires strategic investment, workforce upskilling, and collaboration between audit professionals and IT specialists. By leveraging technology, internal audit functions can evolve into proactive, agile frameworks that align with organizational goals, providing robust risk oversight and contributing to long-term sustainability.

Auditors' Perceptions of Artificial Intelligence, Institutional Pressure, and Auditor Personality on Audit Quality

This study analyses the effect of Artificial Intelligence, institutional pressure, and auditor personality on audit quality. The respondents were 84 auditors at Public Accounting Firms in Surabaya. This research is motivated by the inconsistency of previous research results. In addition, AI, which has begun commonly used by auditors to assist in audit tasks, has become the focus of new research. Auditors' perceptions may differ in accepting that AI will provide benefits or cause disruption during the audit process. Empirical results show that institutional pressure and auditor personality influence audit quality, while the use of AI does not affect audit quality. Although AI can help answer various questions, it's not always directly correlated with audit quality. This research show that managers at public accounting firms need to consider the presence of AI to increase the speed and quality of auditor work. However, they also need to organize and plan AI adoption to avoid unsatisfactory results. In addition, managers must also choose skilled professional auditors who can integrate with AI systems to improve company performance and reduce the risk of misuse of AI systems. In practice, managers still really need to consider personality in the auditor profession and use it as an indicator for assessing quality. In addition, auditors' perception of institutional pressure will improve audit quality if they perceive such pressure as a driving factor for performance quality.

Moderate of organizational culture: independence, integrity, professionalism and experience of internal auditors on fraud prevention

This study aims to examine the effect of internal auditors' independence, integrity, professionalism, and experience on fraud prevention with organizational culture as a moderating variable. The data for this study were collected through a questionnaire, the research respondents were BPR internal auditors in Bali Province. The method of determining the sample was purposive sampling with the criteria of internal auditors who have more than 1 year of work experience, so 149 respondents were obtained. The data analysis technique used in this research is Path Analysis (SEM-PLS). The results showed that the integrity, professionalism, and experience of internal auditors have a positive and significant effect on fraud prevention, while the independence of internal auditors has no significant effect on fraud prevention; and organizational culture strengthens the effect of integrity, professionalism, and experience of internal auditors on fraud prevention, but is unable to strengthen the effect of internal auditor independence on fraud prevention.

The ‘Conventional Wisdom’ of Auditing: Can the Traditions of Auditing Rise to New Challenges?

ABSTRACT In this essay, I will discuss whether the conventional wisdom of auditing is well suited to address the most pressing challenges facing the audit profession. I argue that some of the classic foundations of auditing may need to be reconsidered and adapted if the profession is going to retain its role as a trusted third-party assurance provider. The specific issues considered in this essay include the role of university education for entering the profession, the nature of standardization in the audit process, the impact of auditor tenure on audit quality, the underlying difficulties of achieving independence, the nature of the expectation gap, and the appropriate role of audit regulation and enforcement. While not complete, I use these issues to offer some observations about how evolution in our thinking about these core concepts may be needed for business, markets and societies to continue to instill trust in the assurance we provide.

Factors influencing the use of computer-assisted audit techniques in the digital era

Digitalization is a challenge of the current environment, and the digital transition has extended to the audit profession. It affects the technology used by clients and the pressure on auditors by audit regulations to apply and use computer-assisted audit techniques (CAATs). The results of specialized literature indicate that the application and use of CAATs in auditing practice are limited. Thus, the present research aimed to investigate the factors that could influence the use of CAATs by auditors, based on the Unified Theory of Acceptance and Use of Technology (UTAUT). The empirical investigation consisted of 112 questionnaires that were analyzed by external auditors. The research results indicated a positive influence on the behavioral intention to use CAATs, which was influenced by performance expectations and facilitating conditions. In contrast, effort expectations and social influence did not affect the behavioral intention to use CAATs. We conclude that management should have a greater involvement in encouraging the use and application of CAATs, including supporting the process with the necessary resources. This work augments the knowledge of the factors that influence the behavioral intention to use CAATs among auditors in Romania and can be a useful resource for practitioners.

Technology Adoption Factors for Supreme Audit Institutions

Objective –Arguably, there is a shortage of research on how supreme audit institutions can use cutting-edge technologies to make them more effective and stay up with the evolving audit landscape as we are in the 4IR age. Professional auditing and accounting groups encourage using cutting-edge technologies in accounting and auditing duties. However, public sector auditing is trailing behind in the digital transition. Guidelines regarding the elements that superior audit institutions must consider when implementing cutting-edge technologies are still required. This paper fills the gap in the literature by providing technology adoption factors that have been verified for usefulness and practicability and then evaluated in order of significance by experts from eight different countries. Therefore, the findings and recommendations of the paper are applicable and relevant on a global scale.Design/Methodology –Experts were consulted to validate and rate the importance and practicability of the variables and processes for technology adoption using two Delphi questionnaires.Results –The technology adoption factors identified were assistance from top management, a plan for embracing technology, and fostering an environment focused on digital culture. Assessing the current systems for compliance with legislation, organization-wide preparation, and the ability to incorporate new technology, ongoing staff training, regulatory compliance, environmental policies, and audit standards are necessary. Evaluating the technology's compatibility and complexity, doing a cost-benefit analysis, and determining whether the auditee platforms are ready for advanced technology auditing were rated as important technology adoption factors by experts.

Analisis Faktor-Faktor Yang Mempengaruhi Keterlambatan Dalam Penyelesaian Laporan Audit (Studi Kasus Pada KAP XYZ)

This study aims to analyze what factors influence the delay in completing audit reports at KAP XYZ. This research uses a qualitative method with a descriptive design. Research data obtained through interviews. Based on the results of interviews with KAP XYZ auditors, conclusions can be drawn which include (1) Internal factors that cause delays in completing audit reports include lack of human resources, auditor overload, and auditor competence. Then, (2) External factors that cause delays in completing the audit report include delays in providing documents, unfriendly responses from clients, and data lost during delivery. The results of this study will help the auditor profession in an effort to improve the efficiency and effectiveness of the audit process so as to reduce or even avoid delays in completing audit reports at KAP XYZ.

Auditing in Emerging Economies: A Comparative Study of Algeria and BRICS Nations for Regulatory Alignment

Purpose: This study aims to identify necessary reforms in Algeria's auditing profession to facilitate its potential integration into the BRICS alliance. It seeks to compare Algeria's auditing landscape with that of BRICS countries, addressing the question: What improvements should Algeria introduce to its auditing profession in its bid to join BRICS? Importance/value: This research provides a novel comparative analysis of Algeria's auditing profession in the context of BRICS countries, offering specific recommendations for regulatory and professional development. The findings contribute to the understanding of auditing practices in emerging economies and provide a roadmap for Algeria to enhance its auditing profession, thereby increasing its attractiveness for foreign investment and improving its prospects for BRICS integration. Future research could explore the implementation challenges of these recommendations and their impact on Algeria's economic integration with BRICS nations. Methodology/approach: The research employs institutional theory and regulatory methods proposed by Bédard et al. (2002) as a theoretical framework. It utilizes content analysis of IFAC sources, literature review, and examination of Algerian regulations published in The Official Law Journals. A comparative, analytical approach is applied to assess the auditing systems across BRICS nations and Algeria. Findings: The study reveals significant disparities between Algeria's auditing profession and those of BRICS countries. While BRICS nations have adopted International Standards on Auditing (ISAs) and actively engage in global collaborations, Algeria's auditing standards are not mandatory and lack a comprehensive conceptual framework. Key areas for improvement include enhancing the role of supervisory bodies, mandating the application of Algerian Standards on Auditing, prioritizing ongoing auditor training, and fostering openness to international audit firms. Result: BRICS countries have advanced regulatory frameworks, mandatory adoption of ISAs, and strong international collaborations, while Algeria lags with voluntary standards, and limited training, Additionally, restrictions on international audit firms and weaker auditor accreditation further hinder Algeria's alignment with global best practices.

Application of Risk-Based Audit Approach by Sole Practitioners and Local Audit Firms: Towards Fully-Compliant Financial Reports

The study examined the factors influencing the implementation of the Risk-Based Audit Approach (RBAA). Key variables identified were auditor capability, availability of audit professionals, integration of information technology, job pressure on auditors, competitiveness of audit firms, and audit fees. The respondents included sole practitioners and employed auditors in local audit firms. The research used a quantitative method, employing structured questionnaires to capture respondents’ perceptions. The findings revealed that auditor capability is the most critical factor in applying RBAA. For effective implementation, auditors need industry-specific experience, sufficient training hours, balanced staffing leverage, investment in IT and productivity tools, compliance with firm regulations, and a good ratio of audit hours to risk areas and audit phases. Skilled auditors are more adept at identifying and addressing potential issues. Future research could explore factors affecting auditor capability and the availability of audit professionals.

Public auditors’ perception of digital platforms for popular reporting: insights from the case study of OpenBDAP

PurposeThis paper employs the Biondi and Lapsley (2014) accounting information transparency model to investigate whether effective transparency can be achieved through digital platforms for popular reporting. In order to address the limitations in previous research, which predominantly targets non-expert users, this is attained by focusing on the perception of local government auditors. By engaging auditors who are experts in accounting, the study aims to investigate if any cognitive biases in the design of online platforms could impact the achievement of a sophisticated understanding with shared meanings among citizens.Design/methodology/approachThe study adopts an explorative and inductive approach, semi-structured interviews and an online survey among the Italian local governments’ Professional Auditors’ Association (ANCREL). Auditors assessed the OpenBDAP (https://openbdap.rgs.mef.gov.it/) platform in facilitating the comparison and analysis of the budgets and financial statements of Italian public sector organisations.FindingsThe results present a nuanced assessment of OpenBDAP, highlighting a general consensus on its ability to enhance the access and understanding of financial data and the appreciation of the utility of infographics in understanding financial data. Therefore, a clear challenge emerges in achieving active engagement of stakeholders. Despite expectations expressed during interviews with the Italian National Accounting Office regarding the design of custom APIs to meet user needs, our findings indicate the potential presence of cognitive biases in the design of the online platform as key obstacles.Originality/valueBy extending the application of the Biondi and Lapsley (2014) model on digital platforms for popular reporting to local government auditors, this study highlights the potential presence of cognitive bias in the design of online platforms that may impact the achievement of effective transparency, an aspect not previously identified in existing research. Finally, it suggests that these popular reporting platforms may evolve beyond mere transparency tools, assuming a broader role as potent learning instruments. This transformation could help to address the inherent complexity of accounting information, which is the real obstacle to achieving transparency.

The interaction of blockchain technology, audit process, and the International Financial Reporting Standards

PurposeThis study aims to provide a framework for the interaction of blockchain technology, the audit process and International Financial Reporting Standards (IFRS).Design/methodology/approachThis study was conducted in three phases. In the first phase, a meta-synthesis method was used until 2020. Out of 87 papers, a total number of 15 were selected, and 72 were excluded after an initial screening. In the second phase, 11 interviews were held with experts with sufficient experience and expertise in blockchain technology, accounting and auditing. These interviews were held between 2020 and 2021. The sampling was purposive (targeted) in type, along with snowball sampling. In the third phase, a combination of questionnaire-based method and the fuzzy Delphi method was used. The research population for this phase consisted of accounting professors, members of the Iranian Association of Certified Public Accountants and accounting and technology professionals. Following the selection of the Delphi panel, 35 questionnaires were collected between 2021 and 2022 for analysis.FindingsThe results showed that in line with the interaction of blockchain technology, audit process and IFRS, 52 indicators were confirmed in eight components. Moreover, “Verifiability,” “Timeliness” and “Predictive value” were the most influential factors, respectively, according to the conceptual model. In addition, higher average scores of experts’ views were related to “Transparency audit reports” and “Increasing the quality of the auditor’s judgment”, respectively.Originality/valueBlockchain is a complex subject, and there has been very little published research on the intersection of IFRS and blockchain technology. It is crucial for the audit profession and technology professionals to focus on the interaction of blockchain technology with the qualitative characteristics of information. This is an area that has not been thoroughly researched yet. The interaction of blockchain technology, improvements in the audit process and adherence to IFRS is a significant development in accounting and auditing.

Future auditing: Machine learning's impact on audit capacity stress - young auditors' perceptions using UTAUT

Advancing technologies have potential to revolutionize the future of auditing. This study investigates the impact of machine learning adoption on audit capacity stress among Indonesian external auditors. A survey approach was used to collect data from 100 auditors working in public accounting firms. The Unified Theory of Acceptance and Use of Technology (UTAUT) model was employed to assess factors influencing auditors' perceptions of machine learning usage. The result that comprises of young auditors to be the most respondents show performance expectancy, effort expectancy, and social influence are insignificant towards audit capacity stress. However, facilitating conditions were found to have a significant impact on audit capacity stress, suggesting that infrastructure and resource availability are crucial for young auditors' acceptance of machine learning and its audit capacity stress-reducing effects. Thus, Indonesian auditor requires additional facilitating support to alleviate audit capacity stress. These findings contribute to the understanding of technology adoption and audit capacity stress in the evolving future audit profession.

Sociological research methods with a differentiated approachin regional nursing

Background.In the professional audit of the quality of nursing care, sociological research methods are of particular importance in the context of the formation of skills and abilities, with the help of which a set of expert criteria is formed from the general set of practical activities. Taking into account that the selection of qualified elements requires information about the scientific approach, in proportion to the originality of the expert function, it is relevant to identify them more clearly in the examination, which allows correcting the process of training and retraining of personnel. Objective.Toevaluate the sociological research methods of regional nursing on the example of the Orenburg region. Materials and methods.The main criteria for evaluating the activities of medical workers using the Delphi method are presented. The examination performed by the method of sociological and expert survey of average medical workers (n=535), doctors (n=80), heads of medical institutions (n=10) and patients (n=500) allowed us to formulate formalized indicators for evaluating measures to create innovative training and retraining programs for nursing staff. Mathematical "sketches" of the programs are based on factorial/cluster/discriminant analyses. Results. Sociological research methods in regional nursing have sanctioned a set of parameters of the qualities of a specialist in his professional activity in the context of training and retraining of nursing staff. Conclusion. Mathematical prototypes of programmatic training of medical staff created on the basis of sociological research methods in regional nursing contribute to the algorithmization of improvements in the format of the content and quality of training in order to provide competent and competitive specialists for the industry.