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Cyber-security risks assessment by external auditors

Author

Listed:
  • Tran Nguen Bao Ngo

    (University of Danang, Danang, Vietnam)

  • Andrea Tick

    (Óbuda University,Budapest, Hungary)

Abstract

The rise in cybercriminal activities in recent years has sparked concern about the costs of technological advancement and the growing reliance of humans on technology. The seriousness of this situation in the business world is indeed more noteworthy and more prominent than other areas, prompting many people to wonder how external auditors – who are responsible for identifying any accounting flaws – will respond to cybersecurity-affected businesses – the ones which can make an honest effort to mask and conceal their difficulties and challenges from their investors and stakeholders. Consequently, the aim of this study is to search whether external auditors focus harder on cybersecurity-attacked firms and businesses by charging higher audit fees. The study found a positive correlation between audit fees and breach employing a sample of 100 global small-, medium-sized, and large businesses. This indicates that external auditors find more risks and spend more effort while auditing cybersecurity-attacked businesses.

Suggested Citation

  • Tran Nguen Bao Ngo & Andrea Tick, 2021. "Cyber-security risks assessment by external auditors," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 19(3), pages 375-390.
    • Handle: RePEc:zna:indecs:v:19:y:2021:i:3:p:375-390
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    File URL: https://www.indecs.eu/2021/indecs2021-pp375-390.pdf
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    References listed on IDEAS

    as
    1. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    2. Pierangelo Rosati & Fabian Gogolin & Theo Lynn, 2019. "Audit Firm Assessments of Cyber-Security Risk: Evidence from Audit Fees and SEC Comment Letters," The International Journal of Accounting (TIJA), World Scientific Publishing Co. Pte. Ltd., vol. 54(03), pages 1-56, September.
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    More about this item

    Keywords

    audit fees; cybersecurity risks; OLS model;
    All these keywords.

    JEL classification:

    • A29 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Other
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Y80 - Miscellaneous Categories - - Related Disciplines - - - Related Disciplines

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