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

Pall Rikhardsson and Richard Dull

International Journal of Accounting Information Systems, 2016, vol. 20, issue C, 26-37

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.

Keywords: Continuous auditing technology; Continuous auditing; Small businesses; Internal control; Internal auditing (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijoais:v:20:y:2016:i:c:p:26-37

DOI: 10.1016/j.accinf.2016.01.003

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