The Impact of Information Technology in Audit Quality: In the Case of External Audit Firms in Addis Ababa
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Date
2024-03-17
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A.A.U
Abstract
This study investigated the influence of information technology (IT) on audit quality, focusing on
external audit firms in Addis Ababa. Data analysis employed a descriptive and inferential
approach. Questionnaires were distributed to 98 external auditors to gather necessary
information. IBM SPSS Statistics 2013 software (v22.0) was used to analyze the data, presented
in tables and charts. The findings revealed that all independent variables had positive and
significant coefficients. This indicates that as the value of an independent variable increased, the
mean of the dependent variable (audit quality) also increased. Auditor competency had the
strongest positive and significant effect on audit quality, followed by IT-based auditing, audit risk,
and audit quality itself. The regression analysis indicated that the independent variables included
in the model explained 52.3% of the variance in audit quality. Based on the findings, the study
recommends that The Accounting and Auditing Board of Ethiopia should have prioritized
evaluating the quality of audit firms and grading them based on their performance. Additionally,
firms should provide Continuing Program Development (CPD) and prepare IT-based audit
working papers that include audit procedures, rules, and regulations, as well as analysis working
papers. This will help enhance the auditors' abilities and prevent the risk of material misstatement
due to control risk.
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Keywords
IT based auditing