Does Auditor Objectivity Impact on the Relationship Between Information Technology and Efficiency and Effectiveness of Auditing: Evidence from Iraq
DOI:
https://doi.org/10.6000/1929-7092.2019.08.20Keywords:
Information technology, auditor objectivity, efficiency and effectiveness of auditing.Abstract
This work aims to determine the effect of information technology on effectiveness and efficiency of auditors in the context of non-profit organizations in Iraq. Also to investigate the mediating influence on the relationship between information technology and the audit process' effectiveness and efficiency. The study framework was based on those reported in literature pertaining to the unified theory of acceptance and use of technology (UTAUT). The target population in this work are auditors of Iraqi non-profit organizations. 354 questionnaires were sent to the participants, however, only 262 were returned and deemed applicable for this work, which culminates in a 74.3 percent response rate. SPSS (Statistical Package of Social Science) version 24 was utilized to examine the research model. The data were processed using many statistical techniques, such as (Descriptive Statistics, Correlations Analysis and Multiple Regressions). The study found that there is a significant influence on the auditors' objectivity due to their role as a mediator on the relationship between IT and auditing non-profit organizations. The findings also confirmed that the auditors are required to upgrade their knowledge vis-Ã -vis computerized information systems to plan, direct, supervise, and review the performed tasks. The implications of these findings in this work are significant for managers and auditors, while also providing insights and encouraging evaluation of computerized accounting systems.
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Jamtsho, C. (2005). Environmental auditing and sustainable development from the perspective of a government auditing (Doctoral dissertation, University of East Anglia, UK).
Janvrin, D., Bierstaker, J., & Lowe, D. J. (2008). An Examination of Audit Information Technology Use and Perceived Importance. Accounting Horizons, 22(1), 1–21.
https://doi.org/10.2308/acch.2008.22.1.1
Kabiru, I. D. & Rufai, A. S. (2014). An examination into the Quality of Audited Financial Statements of Money Deposit Banks in Nigeria.
Karapetrovic, S. & Willborn, W. (2000). Quality assurance and effectiveness of audit systems. International Journal of Quality & Reliability Management, 17(6), 679-703.
https://doi.org/10.1108/02656710010315256
Kim, J. B. B., Song, B. Y. & Tsui, J. S. (2007). Auditor quality, tenure, and bank loan pricing. Tenure, and Bank Loan Pricing (March 1, 2007).
https://doi.org/10.2139/ssrn.873598
Kueppers, R. J. & Sullivan, K. B. (2010). How and why an independent audit matters. International Journal of Disclosure and Governance, 7(4), 286-293.
https://doi.org/10.1057/jdg.2010.22
Lim-u-sanno, K., & Ussahawanitchakit, P. (2009). Audit Risk Judgment and Performance of Thai Auditors: An Empirical Investigation of Their Antecedents and Consequences, Journal of Academy of Business and Economics, 9 (3), 59–83.
Lupasc, A., Lupasc, I., & Zamfir, C. G. (2011). Integration of Modern Information Technologies in the Field of Financial Accounting. Paper presented at the International Conference “Risk in Contemporary Economy”. Galati, Romania.
Mohamed, D. M. & Habib, M. H. (2013). Auditor independence, audit quality and the mandatory auditor rotation in Egypt. Education, Business and Society: Contemporary Middle Eastern Issues, 6(2), 116-144.
https://doi.org/10.1108/EBS-07-2012-0035
Noteberg, A., Benford, T. L., & Hunton, J. E. (2003). Matching electronic communication media and audit tasks. International Journal of Accounting Information Systems, 4(1), 27–55.
https://doi.org/10.1016/S1467-0895(03)00003-4
Parkes, A. (2013). The effect of task–individual–technology fit on user attitude and performance: An experimental investigation. Decision Support Systems, 54(2), 997–1009.
https://doi.org/10.1016/j.dss.2012.10.025
Payne, E. A., & Curtis, M. B. (2008). Can the Unified Theory of Acceptance and Use of Technology Help Us Understand the Adoption of Computer-Aided Audit Techniques by Auditors? Working paper, University of Louisville.
Podsakoff, P. M., MacKenzie, S. B. & Podsakoff, N. P. (2012). Sources of method bias in social science research and recommendations on how to control it. Annual Review of Psychology, 63, 539-569.
https://doi.org/10.1146/annurev-psych-120710-100452
Rowley, J. (2014). Designing and using research questionnaires. Management Research Review, 37(3), 308-330.
https://doi.org/10.1108/MRR-02-2013-0027
Richards, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2008). Measuring organizational performance as a dependent variable: Towards methodological best practice. Strategic Management Journal.
Rishel, T. D.; and S. H. Ivancevich (2003), “Additional opportunities for Internal auditors in IT implementations”, Internal Auditing, Boston, Mar/Apr, Vol. 18, Iss. 2, pp. 35 - 39.
Ritchie, B., & Khorwatt, E. (2007). The attitude of Libyan auditors to inherent control risk assessment. The British Accounting Review, 39(1), 39-59.
https://doi.org/10.1016/j.bar.2006.11.001
Romero, S. (2010). Auditor independence: third party hiring and paying auditors. EuroMed Journal of Business, 5(3), 298-314.
https://doi.org/10.1108/14502191011080827
Sekaran, U. (2003). Research methods for business: A skill building approach. New York: John Wille, y pp.-311.
Salih, W. K. & Hla, D. T. (2015). Audit Quality in Federal Board of Supreme Audit of Iraq, International Conference on Contemporary Issues in Accounting and Finance (CoCIAF).
Sinchuen, C, & Ussahawanitchakit, P. (2010). Audit specialization, Audit performance, and Sustainable reputation: An empirical research of Certified public accountants in Thailand, Journal of International Business and Economics, (10), 103-126.
Sinchuen, C, & Ussahawanitchakit, P. (2010). Audit specialization, Audit performance, and Sustainable reputation: An empirical research of Certified public accountants in Thailand, Journal of International Business and Economics, (10), 103-126.
Singleton, T. (2011). Have You Audited Your Firm’s IT? How IT auditors can make judgments and identify risks.
Tseng, C. Y. (2007). Internal control, enterprise risk management, and firm performance. ProQuest.
Venkatesh, V., M. Morris, G. Davis, and F. Davis. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly 27 (3), 425–478.
https://doi.org/10.2307/30036540
Venter, J. M. P. & Du Bruyn, R. (2002). Reviewing the internal auditing function: Processes and procedures. Meditari Accountancy Research, 10(1), 227-241.
https://doi.org/10.1108/10222529200200012
Wong, K. K. K. (2013). Partial least squares structural equation modeling (PLS-SEM) techniques using SmartPLS. Marketing Bulletin, 24(1), 1-32.
Work Plan of Federal Board of Supreme Audit of Iraq. (2018). Work Plan of the Federal Board of Supreme Audit of Iraq (FBSA).
Zhao, N., D.C. Yen, & I. Chang. (2004). Auditing in the e-commerce era. Information Management & Computer Security, 12 (5), 389-400.
https://doi.org/10.1108/09685220410563360
https://doi.org/10.1108/02686900610661405
Adulwahab, L. & Dahalin, Z. M. (2011). Effectiveness of Telecentre Using a Model of Unified Theory of Acceptance and Use of Technology (UTAUT): Structural Equation Modeling Approach. Emerging Trends in Computing and Information Sciences, 2(9), 402-406.
Ahmi, A. & Kent, S. (2013). The Utilisation of Generalised Audit Software (GAS) by external auditors. Managerial Auditing Journal, 28(2), 88–113.
https://doi.org/10.1108/02686901311284522
Al-Ansi, A. A., Ismail, N. A. Bin, & Al-Swidi, A. K. (2013). The Effect of IT knowledge and IT Training on the IT Utilisation among External Auditors: Evidence from Yemen. Asian Social Science, 9(10).
https://doi.org/10.5539/ass.v9n10p307
Al-Khaddash, H., Al Nawas, R. & Ramadan, A. (2013). Factors affecting the quality of auditing: The case of commercial bank. International Journal of Business and Social Science, 4(11), 206-222.
https://doi.org/10.2308/jis.2002.16.2.209
Alyahya, M., & Suhaimi, M. A. A (2013) Conceptual Model for Business and Information Technology Strategic Alignment from the Perspective of Small and Medium Enterprises. International Journal of Business, Humanities and Technology, 3 (7) 83-90
American Institute of Certified Public Accountants (AICPA) (2001). The effect of information technology on the auditor's consideration of internal control in a financial statement audit. Statement of auditing standard no. 94. New York, NY: AICPA.
ASOSAI, (2009). Quality Assurance in Financial Auditing, Asian Organization of Supreme Audit Institutions, a Handbook.
Banker, R. D., Chang, H., & Kao, Y. (2002). Impact of Information Technology on Public Accounting Firm Productivity. Journal of Information Systems, 16(2), 209–222.
Bierstaker, J. Janvrin, D., & Lowe, D.J. (2014). What factors influence auditors' use of computer-assisted audit techniques? Advances in Accounting, incorporating Advances in International Accounting, 30(2014), pp. 67–74.
https://doi.org/10.1016/j.adiac.2013.12.005
Cameran, M., Di Vincenzo, D. and Merlotti, E. (2005), “The audit firm rotation: a review of the literature”, Working Papers Series of School of Management, Bacconi University, Milan.
Cannon, D. M.; G. A. Crowe, (2004) ""SOA Compliance: Will IT Sabotage Your Efforts?"", The Journal of Corporate Accounting and Finance; (Vol. 15, Iss. 5), pp. 31 – 37.
https://doi.org/10.1002/jcaf.20035
Chan C., (2004) ""Sarbanes – Oxley: The IT Dimension"", The Internal Auditor, Altamonte, Springs, (Vol. 61, Iss. 1), pp. 31 – 33.
Chan, Y. E., Huff, S. L., Barclay, D. W., & Copeland, D. G. (1997). Business strategic orientation, information systems strategic orientation, and strategic alignment, Information Systems Research, 8(2), 125-150.
https://doi.org/10.1287/isre.8.2.125
Cukier, W., Barkel, E., Vaughan, T. & Gekas, G. (2012). Quality assurance in Canadian police services. The TQM Journal, 24(4), 295-309.
https://doi.org/10.1108/17542731211247337
Fuentes, C. M., Benavent, F. B., Moreno, M. A. E., Cruz, T. G. & del Val, M. P. (2000). Analysis of the implementation of ISO 9000 quality assurance systems. Work Study, 49(6), 229-241.
https://doi.org/10.1108/00438020010343408
Golafshani, N. (2003). Understanding reliability and validity in qualitative research. The Qualitative Report, 8(4), 597-606.
Gul, F.A., Jaggi, B.L. and Krishnan, G.V. (2007), “Auditor independence: evidence on the joint effects of auditor tenure and non-audit fees”, Auditing Journal of Practice and Theory, Vol. 26 No. 2, pp. 117-142.
https://doi.org/10.2308/aud.2007.26.2.117
Hair, J. F., Hult, G. T. M., Ringle, C. & Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM). Sage Publications.
Hair, J. F., Sarstedt, M., Ringle, C. M. & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40(3), 414-433.
https://doi.org/10.1007/s11747-011-0261-6
Hill, R. (1998). What sample size is “enough” in internet survey research? Interpersonal Computing and Technology. An Electronic Journal for the 21st Century, 6(3-4), 1-10.
Helms, G. L. (1999). Top Technology Concerns for the Attest, Audit and Assurance Services Functions. IS Audit and Control Journal (II), 46–8.
International Accounting Education Standards Board (IAESB). (2014). Initial Professional Development – Professional Skills (Revised) facilitated by the International Federation of Accountants (IFAC) (pp. 1–13).
International Federation of Accountants (IFAC). (2011). Proposed International Education Practice Statement2.1: Information Technology for Professional Accountants, International Accounting Education Standards Board.
Jamtsho, C. (2005). Environmental auditing and sustainable development from the perspective of a government auditing (Doctoral dissertation, University of East Anglia, UK).
Janvrin, D., Bierstaker, J., & Lowe, D. J. (2008). An Examination of Audit Information Technology Use and Perceived Importance. Accounting Horizons, 22(1), 1–21.
https://doi.org/10.2308/acch.2008.22.1.1
Kabiru, I. D. & Rufai, A. S. (2014). An examination into the Quality of Audited Financial Statements of Money Deposit Banks in Nigeria.
Karapetrovic, S. & Willborn, W. (2000). Quality assurance and effectiveness of audit systems. International Journal of Quality & Reliability Management, 17(6), 679-703.
https://doi.org/10.1108/02656710010315256
Kim, J. B. B., Song, B. Y. & Tsui, J. S. (2007). Auditor quality, tenure, and bank loan pricing. Tenure, and Bank Loan Pricing (March 1, 2007).
https://doi.org/10.2139/ssrn.873598
Kueppers, R. J. & Sullivan, K. B. (2010). How and why an independent audit matters. International Journal of Disclosure and Governance, 7(4), 286-293.
https://doi.org/10.1057/jdg.2010.22
Lim-u-sanno, K., & Ussahawanitchakit, P. (2009). Audit Risk Judgment and Performance of Thai Auditors: An Empirical Investigation of Their Antecedents and Consequences, Journal of Academy of Business and Economics, 9 (3), 59–83.
Lupasc, A., Lupasc, I., & Zamfir, C. G. (2011). Integration of Modern Information Technologies in the Field of Financial Accounting. Paper presented at the International Conference “Risk in Contemporary Economy”. Galati, Romania.
Mohamed, D. M. & Habib, M. H. (2013). Auditor independence, audit quality and the mandatory auditor rotation in Egypt. Education, Business and Society: Contemporary Middle Eastern Issues, 6(2), 116-144.
https://doi.org/10.1108/EBS-07-2012-0035
Noteberg, A., Benford, T. L., & Hunton, J. E. (2003). Matching electronic communication media and audit tasks. International Journal of Accounting Information Systems, 4(1), 27–55.
https://doi.org/10.1016/S1467-0895(03)00003-4
Parkes, A. (2013). The effect of task–individual–technology fit on user attitude and performance: An experimental investigation. Decision Support Systems, 54(2), 997–1009.
https://doi.org/10.1016/j.dss.2012.10.025
Payne, E. A., & Curtis, M. B. (2008). Can the Unified Theory of Acceptance and Use of Technology Help Us Understand the Adoption of Computer-Aided Audit Techniques by Auditors? Working paper, University of Louisville.
Podsakoff, P. M., MacKenzie, S. B. & Podsakoff, N. P. (2012). Sources of method bias in social science research and recommendations on how to control it. Annual Review of Psychology, 63, 539-569.
https://doi.org/10.1146/annurev-psych-120710-100452
Rowley, J. (2014). Designing and using research questionnaires. Management Research Review, 37(3), 308-330.
https://doi.org/10.1108/MRR-02-2013-0027
Richards, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2008). Measuring organizational performance as a dependent variable: Towards methodological best practice. Strategic Management Journal.
Rishel, T. D.; and S. H. Ivancevich (2003), “Additional opportunities for Internal auditors in IT implementations”, Internal Auditing, Boston, Mar/Apr, Vol. 18, Iss. 2, pp. 35 - 39.
Ritchie, B., & Khorwatt, E. (2007). The attitude of Libyan auditors to inherent control risk assessment. The British Accounting Review, 39(1), 39-59.
https://doi.org/10.1016/j.bar.2006.11.001
Romero, S. (2010). Auditor independence: third party hiring and paying auditors. EuroMed Journal of Business, 5(3), 298-314.
https://doi.org/10.1108/14502191011080827
Sekaran, U. (2003). Research methods for business: A skill building approach. New York: John Wille, y pp.-311.
Salih, W. K. & Hla, D. T. (2015). Audit Quality in Federal Board of Supreme Audit of Iraq, International Conference on Contemporary Issues in Accounting and Finance (CoCIAF).
Sinchuen, C, & Ussahawanitchakit, P. (2010). Audit specialization, Audit performance, and Sustainable reputation: An empirical research of Certified public accountants in Thailand, Journal of International Business and Economics, (10), 103-126.
Sinchuen, C, & Ussahawanitchakit, P. (2010). Audit specialization, Audit performance, and Sustainable reputation: An empirical research of Certified public accountants in Thailand, Journal of International Business and Economics, (10), 103-126.
Singleton, T. (2011). Have You Audited Your Firm’s IT? How IT auditors can make judgments and identify risks.
Tseng, C. Y. (2007). Internal control, enterprise risk management, and firm performance. ProQuest.
Venkatesh, V., M. Morris, G. Davis, and F. Davis. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly 27 (3), 425–478.
https://doi.org/10.2307/30036540
Venter, J. M. P. & Du Bruyn, R. (2002). Reviewing the internal auditing function: Processes and procedures. Meditari Accountancy Research, 10(1), 227-241.
https://doi.org/10.1108/10222529200200012
Wong, K. K. K. (2013). Partial least squares structural equation modeling (PLS-SEM) techniques using SmartPLS. Marketing Bulletin, 24(1), 1-32.
Work Plan of Federal Board of Supreme Audit of Iraq. (2018). Work Plan of the Federal Board of Supreme Audit of Iraq (FBSA).
Zhao, N., D.C. Yen, & I. Chang. (2004). Auditing in the e-commerce era. Information Management & Computer Security, 12 (5), 389-400.
https://doi.org/10.1108/09685220410563360
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Published
2018-02-19
How to Cite
Salih, W. K. (2018). Does Auditor Objectivity Impact on the Relationship Between Information Technology and Efficiency and Effectiveness of Auditing: Evidence from Iraq. Journal of Reviews on Global Economics, 8, 226–238. https://doi.org/10.6000/1929-7092.2019.08.20
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