Disruptive technology and audit risks: Evidence from FTSE 100 companies

Marwa Elnahass, Xinrui Jia and Louise Crawford

Emerging Markets Review, 2024, vol. 63, issue C

Abstract: We investigate the use of disruptive technology on the level of audit risk, within both companies and audit firms. A sample of FTSE 100 and their corresponding audit firms—specifically, the ‘Big 4’—are selected for the period 2015 to 2020. Our findings indicate that the utilisation of disruptive technology results in a significant reduction in audit risk for both companies and audit firms. Disruptive technology seems to promote benefits to companies and audit firms by significantly mitigating the risk of material misstatements (i.e. inherent and control risk) and detection risk; these results are consistent across various industry classifications.

Keywords: Disruptive technology; Data analytics; Big data; Audit risk; Audit firms (search for similar items in EconPapers)
JEL-codes: C30 M40 M41 M42 M49 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:63:y:2024:i:c:s1566014124001134

DOI: 10.1016/j.ememar.2024.101218

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