"Real-izing" the benefits of new technologies as a source of audit evidence: An interpretive field study

Abstract The development of new audit technologies has been the focus of a great deal of attention by both auditing academics and CPA firm administrators during the past decade. Many resources have been devoted to the development and scientific validation of sophisticated new technologies with the anticipation that increased audit “efficiency”, as well as improved “effectiveness” and inter-auditor judgment “consensus”, would result. The primary focus of these efforts, and the related publications, have been on the technologies themselves, in the apparent belief that qualities such as “efficiency” exist objectively in the technologies. However, essentially no published research exists that has examined the use of these new technologies by audit practitioners. The study reported in this paper was conducted as an interpretive field study within several “Big 6” CPA firms, with a focus on proprietary audit technologies that had been recently implemented or discontinued. All of the technologies involved new audit approaches, rather than simply the automation of existing, established approaches to audit evidence generation and evaluation. The central finding reported in this paper is that benefits in the form of enhanced audit efficiency did not result directly from the adoption and use of these new technologies. Rather, where they were reported to have occurred, these benefits resulted from the concomitant reduction or elimination of other audit procedures that had been performed in the past. Based upon these findings, it is argued that the “benefits” of new audit technologies, as a source of audit evidence, do not exist objectively in the technologies themselves, and that these benefits are not automatically realized through the adoption and use of the technologies. Rather, the benefits attributed to the technologies are seen to be made real, or “real-ized”, through actions taken by the auditors concurrent with technology adoption.

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