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Impact of Technological Advancements on Auditing of Financial Statements

Author

Listed:
  • Joshua Onome Imoniana
  • Daniel Carlos Nava Filho
  • Edgard Bruno Cornacchione
  • Luciane Reginato
  • Cristiane Benetti

Abstract

Purpose: This study sought to analyse the impacts of technological advances and innovations on auditing of financial statements. Design/Methodology/Approach: The research methodology is qualitative, drawing on interpretive and constructivist perspective. In doing so, answers the question of how the auditing has been impacted by information technology. It exercises content analysis on data gathered from corporate webpages of larger auditing firms predominantly the Big Four, Webinar organized by one of the Big four firms on October 2022, Data from 13th Ibracon Conference organized by Institute of Independent Auditors of Brazil in June 2023 and documents comprising the International Auditing Standards (ISA) and at the end categorizing analysis into templates. Findings: Show that the auditing has been technologically impacted by Computer Assisted Audit Techniques (CAAT) tools, Capacity building of the IT auditor, Artificial Intelligence in auditing, Deep learning in auditing and Emerging Technological impact of Continuous Auditing of Blockchain. Generally, auditing is technologically impacted in three manners, planning of an engagement, during the performance and during the reporting stages. Impact is also felt with the innovative technologies such as supervised-AI for data extraction and exception analysis. IoT, Drones monitoring with satellite imagery, Remote Sensing, Deep Learning and Robotic Process Automation. Practical Implications: Constituting the innovations being implemented at different paces by the auditing firms. However, ISA has not obliged the auditors to use this or that technology leaving them to their pace. To drive down innovation in auditing team, this study recommends that IS and IT expertise be incorporated in the financial auditing engagement team for appropriate development and not just treating them as expert service. Originality/Value: The study contributes to theories in as much as it provides relevant input/output for discussions of technological impacts on auditing to assist practitioners, regulators and policymakers.

Suggested Citation

  • Joshua Onome Imoniana & Daniel Carlos Nava Filho & Edgard Bruno Cornacchione & Luciane Reginato & Cristiane Benetti, 2023. "Impact of Technological Advancements on Auditing of Financial Statements," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 131-159.
    • Handle: RePEc:ers:journl:v:xxvi:y:2023:i:4:p:131-159
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    References listed on IDEAS

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    1. Eleftherios Thalassinos, 2008. "Trends and Developments in the European Financial Sector," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2008(3), pages 44-61.
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    3. Gratiela Georgiana Noja & Eleftherios Thalassinos & Mirela Cristea & Irina Maria Grecu, 2021. "The Interplay between Board Characteristics, Financial Performance, and Risk Management Disclosure in the Financial Services Sector: New Empirical Evidence from Europe," JRFM, MDPI, vol. 14(2), pages 1-20, February.
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    5. Chen, Ruey-Shun & Sun, Chia-Ming & Helms, Marilyn M. & (Kenny) Jih, Wen-Jang, 2008. "Aligning information technology and business strategy with a dynamic capabilities perspective: A longitudinal study of a Taiwanese Semiconductor Company," International Journal of Information Management, Elsevier, vol. 28(5), pages 366-378.
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    More about this item

    Keywords

    IT Auditing; Computer Assisted Audit Techniques; CAAT; Artificial Intelligence; International Standards on Auditing; 5.0 Technology; ISA; Auditing Technology; Innovation.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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