IDEAS home Printed from https://ideas.repec.org/a/eee/ijoais/v20y2016icp26-37.html
   My bibliography  Save this article

An exploratory study of the adoption, application and impacts of continuous auditing technologies in small businesses

Author

Listed:
  • Rikhardsson, Pall
  • Dull, Richard

Abstract

Continuous auditing technology has been studied in various contexts, but mostly within large enterprises with their own integrated information systems and internal auditing functions. Although several vendors of continuous auditing technologies have reported implementations in small businesses, little is known about the use and impact of this technology in this type of organizations. This exploratory study considers the motivations for adopting a certain type of continuous auditing technology, as well as the applications and impacts of this technology in seven small businesses. The results indicate that the technology is usually implemented to increase resource efficiency, but is frequently perceived as a tool to fix data quality problems — rather than a strategically aligned technology. Implementation is not driven by an internal auditing department but by either an IT or finance department. Application of the technology is first and foremost transaction verification with process control applications emerging later. Main impacts include a change from corrective controls to preventive and detective controls; an increase in the perception of value created by the financial department; and an increase in management trust of data. The study also reveals potential negative impacts of this technology, such as alert immunization and loss of users' critical thinking.

Suggested Citation

  • Rikhardsson, Pall & Dull, Richard, 2016. "An exploratory study of the adoption, application and impacts of continuous auditing technologies in small businesses," International Journal of Accounting Information Systems, Elsevier, vol. 20(C), pages 26-37.
    • Handle: RePEc:eee:ijoais:v:20:y:2016:i:c:p:26-37
    DOI: 10.1016/j.accinf.2016.01.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1467089516300112
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.accinf.2016.01.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Granlund, Markus, 2011. "Extending AIS research to management accounting and control issues: A research note," International Journal of Accounting Information Systems, Elsevier, vol. 12(1), pages 3-19.
    2. Sutton, Steve G., 2010. "A research discipline with no boundaries: Reflections on 20years of defining AIS research," International Journal of Accounting Information Systems, Elsevier, vol. 11(4), pages 289-296.
    3. Peter J. Best & George Mohay & Alison Anderson, 2004. "Machine‐independent audit trail analysis—a tool for continuous audit assurance," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 85-102, April.
    4. Vasarhelyi, Miklos A. & Alles, Michael & Kuenkaikaew, Siripan & Littley, James, 2012. "The acceptance and adoption of continuous auditing by internal auditors: A micro analysis," International Journal of Accounting Information Systems, Elsevier, vol. 13(3), pages 267-281.
    5. Chan, David Y. & Vasarhelyi, Miklos A., 2011. "Innovation and practice of continuous auditing," International Journal of Accounting Information Systems, Elsevier, vol. 12(2), pages 152-160.
    6. Chenhall, Robert H., 2003. "Management control systems design within its organizational context: findings from contingency-based research and directions for the future," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 127-168.
    7. Gonzalez, George C. & Sharma, Pratyush N. & Galletta, Dennis F., 2012. "The antecedents of the use of continuous auditing in the internal auditing context," International Journal of Accounting Information Systems, Elsevier, vol. 13(3), pages 248-262.
    8. Berry, A.J. & Coad, A.F. & Harris, E.P. & Otley, D.T. & Stringer, C., 2009. "Emerging themes in management control: A review of recent literature," The British Accounting Review, Elsevier, vol. 41(1), pages 2-20.
    9. Fariborz Damanpour, 1996. "Organizational Complexity and Innovation: Developing and Testing Multiple Contingency Models," Management Science, INFORMS, vol. 42(5), pages 693-716, May.
    10. Bongsug Kevin Chae & David L. Olson, 2013. "Business Analytics For Supply Chain: A Dynamic-Capabilities Framework," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 9-26.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kanyarat (Lek) Sanoran & Jomsurang Ruangprapun, 2023. "Initial Implementation of Data Analytics and Audit Process Management," Sustainability, MDPI, vol. 15(3), pages 1-14, January.
    2. Fábio Albuquerque & Paula Gomes Dos Santos, 2023. "Recent Trends in Accounting and Information System Research: A Literature Review Using Textual Analysis Tools," FinTech, MDPI, vol. 2(2), pages 1-27, April.
    3. Adrian-Cosmin Caraiman, 2020. "Internal Control in Corporate Governance," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 606-611, December.
    4. Kokina, Julia & Blanchette, Shay, 2019. "Early evidence of digital labor in accounting: Innovation with Robotic Process Automation," International Journal of Accounting Information Systems, Elsevier, vol. 35(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rikhardsson, Pall & Yigitbasioglu, Ogan, 2018. "Business intelligence & analytics in management accounting research: Status and future focus," International Journal of Accounting Information Systems, Elsevier, vol. 29(C), pages 37-58.
    2. Fábio Albuquerque & Paula Gomes Dos Santos, 2023. "Recent Trends in Accounting and Information System Research: A Literature Review Using Textual Analysis Tools," FinTech, MDPI, vol. 2(2), pages 1-27, April.
    3. Amani, Farzaneh A. & Fadlalla, Adam M., 2017. "Data mining applications in accounting: A review of the literature and organizing framework," International Journal of Accounting Information Systems, Elsevier, vol. 24(C), pages 32-58.
    4. Stefan N. Groesser & Niklas Jovy, 2016. "Business model analysis using computational modeling: a strategy tool for exploration and decision-making," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 27(1), pages 61-88, February.
    5. Jafar Ojra & Abdullah Promise Opute & Mohammad Mobarak Alsolmi, 2021. "Strategic management accounting and performance implications: a literature review and research agenda," Future Business Journal, Springer, vol. 7(1), pages 1-17, December.
    6. Patrizia Di Tullio & Matteo La Torre & Diego Valentinetti & Michele A. Rea, 2021. "Toward performance measurement systems based on business models," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2021(suppl. 1), pages 97-122.
    7. Jochen Fähndrich, 2023. "A literature review on the impact of digitalisation on management control," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 34(1), pages 9-65, March.
    8. Tung-Hsien Wu & Shi-Ming Huang & Shaio Yan Huang & David C. Yen, 2017. "The effect of competencies, team problem-solving ability, and computer audit activity on internal audit performance," Information Systems Frontiers, Springer, vol. 19(5), pages 1133-1148, October.
    9. Matolcsy, Zoltan & Wakefield, James, 2017. "Multinational headquarter control of wholly owned foreign subsidiaries," The British Accounting Review, Elsevier, vol. 49(3), pages 275-293.
    10. Martin Quinn & Peter Cleary & Catherine Batt & Pall Rikhardsson, 2021. "Accounting and Information Systems in Irish Family SME: Professionalisation Effects," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 20(3), pages 454-476, September.
    11. Andrea Fried, 2017. "Terminological distinctions of ‘control’: a review of the implications for management control research in the context of innovation," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(1), pages 5-40, February.
    12. Jürgen Harrer & Andreas Wald, 2016. "Levers of enterprise security control: a study on the use, measurement and value contribution," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 27(1), pages 7-32, February.
    13. Alexander Tkotz & Jan Christoph Munck & Andreas Erich Wald, 2018. "Innovation Management Control: Bibliometric Analysis Of Its Emergence And Evolution As A Research Field," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-34, April.
    14. Tobias Johansson & Gabriella Wennblom, 2017. "In female supervisors male subordinates trust!? An experiment on supervisor and subordinate gender and the perceptions of tight control," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(3), pages 321-345, October.
    15. Kubota, Takaya & Okuda, Shin'ya, 2023. "Relationship between top managers’ interest in accounting information and accounting practices in startups," International Journal of Accounting Information Systems, Elsevier, vol. 51(C).
    16. Frederic Läger & Yassin Denis Bouzzine & Rainer Lueg, 2022. "The relationship between firm complexity and corporate social responsibility: International evidence from 2010–2019," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 549-560, May.
    17. Lueg, Rainer & Radlach, Ronny, 2016. "Managing sustainable development with management control systems: A literature review," European Management Journal, Elsevier, vol. 34(2), pages 158-171.
    18. Andrea Cardoni & Evgeniia Kiseleva & Francesco De Luca, 2020. "Continuous auditing and data mining for strategic risk control and anticorruption: Creating “fair” value in the digital age," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3072-3085, December.
    19. Mohamed Z. Elbashir & Steve G. Sutton & Habib Mahama & Vicky Arnold, 2021. "Unravelling the integrated information systems and management control paradox: enhancing dynamic capability through business intelligence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 1775-1814, April.
    20. Brown, Paul & Ly, Tuan & Pham, Hannah & Sivabalan, Prabhu, 2020. "Automation and management control in dynamic environments: Managing organisational flexibility and energy efficiency in service sectors," The British Accounting Review, Elsevier, vol. 52(2).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ijoais:v:20:y:2016:i:c:p:26-37. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/international-journal-of-accounting-information-systems/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.