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Qualitative Analysis on Information Communication Technology and Auditing

Practices of Accounting Professionals

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Journal of Information and Computational Science ISSN: 1548-7741

Qualitative Analysis on Information Communication

Technology and Auditing Practices of Accounting
Professionals

Mohammed Muneerali Thottoli *

Bharathiar University, Research & Development Centre, India.
muneerali.cs@gmail.com

Thomas K.V.
Marian College Kuttikkanam (Autonomous),India.
thomas.kv@mariancollege.org

Essia Ries Ahmed

University of Nizwa ,College of Economics, Management &Information Systems,Oman.
essa_ahmed15@yahoo.com

* Corresponding Author

Abstract
This paper aims to determine the influence of the Information Communication Technology (ICT)
on auditing practices of accounting professionals using a qualitative approach. The paper further
explained the significance of the auditing practices of accounting professionals, evaluated the
relationship between ICT and auditing practices. The study used a purposive sampling technique
to select the target respondents required for the survey (semi-structured interview). This technique
is applied by selecting members of auditors among big 4 auditing firms. A total number of four
members are selected as the sample size for the study based on their experience and basic
knowledge of accounting and auditing done using customized auditing software and it’s
professional in reviewing and auditing practices. The findings revealed that the ICT have a
significant impact on the auditing practices, meaning that there is a positive and significant
relationship between the ICT and the auditing practices of accounting professionals. In addition,
this study indicates the empirical evidence of ICT effects on accounting and auditing practices
among professional auditors.

Keywords:Information Communication Technology, Auditing Practices, Accounting

Professionals

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1. Introduction
The accounting profession perception mainly on providing financial statements, taxation services
and auditing (Albring, Robinson, & Robinson, 2014; Phang, & Foong, 2010). The reputation,
relevance and value of the accountancy and auditing profession depends on the ability of its
members continually to meet the expectations of various stakeholders and to provide a service
appropriate to the needs of the particular environment in which they operate (Wessels, 2005). Since
professional accountants are often assigned to job assignments that frequently vary in terms of task
complexity, the ability to share clienteleor industry-specific knowledge, experience and insights is
crucial for effective task performance, and knowledge management is of special relevance and
importance to accounting firms for managing their capability to create and diffuse knowledge
within the firms (Curtis, & Taylor, 2018; Tan, & Laswad, 2018). To improve the quality, efficiency
and effectiveness of their services, professional accountants must resourcefully identify, acquire
and utilize knowledge (Phang, & Foong, 2010).ICTs could be effective tools to facilitate
knowledge acquisition and sharing (Sharma, Tanyi & Litt, 2016). With ICTs, it is now
economically feasible for professionals to collect and share valuable information, knowledge and
ideas across functions, divisions and geographical boundaries (Taiwo, 2016; Fowler, 2000). ICTs
provide the essential technical infrastructure for promoting and managing knowledge management
activities (Pan, & Seow, 2016). Numerous studies have explored the relationship between ICTs
and knowledge sharing (Clara, Canedo, & de Sousa Júnior, 2017; Phang, & Foong, 2010; June,
Luan & Serban, 2002; Hendriks, 2001; Johnson, 2003; Robertson, Scarbrough, & Swan, 2002;
Song, 2002). However, the effectiveness of ICTs in supporting knowledge creation and sharing
depends largely on the nature of knowledge needed to be acquired or transferred (Phang, & Foong,
2010).

In Global Vision (2006: 2–3), the ‘Big4’ accounting firms plus Grant Thornton and BDO
International have jointly proposed an overhaul of the current financial reporting systems with a
view to meeting the current economic and business as well as ICT realities and dynamics
(Omoteso, Patel, & Scott, 2010). According to the proposal, ‘the auditing profession needs to
develop talent and expertise to deliver consistent, high-quality audit services in the coming
environment, both through the hiring of outstanding individuals and the training of auditors in new
auditing techniques (Baksaas, & Stenheim, 2019). The use of ICT in auditing presents huge
challenges to the institutional forms or structures that will make audit automation effective
(Omoteso, 2016). The challenges bear on theoretical debates on the roles of agencies and structures
in institutions as well as debates on the use of a contingency approach by institutions undergoing
important transformation such as the one presented by audit mechanization.
A study done by Omoteso et al., (2010) they were recommended that assessment of the degree of
integration of ICT in audit be carried out. Since structure and interaction are considered both the
medium and outcome of each other, a longitudinal study over a period of three to five years is
likely to yield a better understanding of the impact of ICT at a particular technological state. So,

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Most of the professional bodies have, however, integrated the application of technology and
information into most of the other subjects that future Accountants study (for example, Business
Management, Auditing, Risk Management, Business Applications) (Wessels, 2005). However,
the revolutionary changes brought about by the ICT enabled business environment may affect the
way in which the audit is performed (Kozlowski, 2018). The enhanced use of ICT changes the
processing, storage and communication of financial information and may affect the accounting
and internal control systems employed by the entity (Senft, Gallegos, & Davis, 2016). The auditor
should have sufficient knowledge of such systems to plan, direct, supervise and review the work
performed. The auditor should consider whether specialized strategic computer information
systems skills are needed in an audit. At present auditor’s use computerized auditing techniques in
addition to the traditional auditing techniques such as physical vouching. As there are no specific
studies that examine the impact of ICT on auditing practices, there is no clarity regarding the
auditing practices that auditors follow in an ICT enabled environment. Thus, the objectives of this
study to examine the impact of the ICT on auditing practices of accounting professionals.

2. Literature Review
In the existing literature a number of pertinent studies were identified. For instance, Mazza, and
Azzali, (2018) was analyzed the impact of Information Technology Controls quality on control
risk and audit fees. This study states that audit fees are lower for higher IT scoping quality, IT
Controls segregation of duties, and IT Controls framework compliance. The overall conclusion is
that IT Controls quality is related to lower control risk, audit fees, and audit effort. Kotb, Abdel-
Kader, Allam, AHalabi, and Franklin, (2019) was seeks the perceptions of accounting educators
and professional accounting bodies in the UK and Ireland on the status of technological
developments within accounting curricula. Results mentioned that technological developments
represent an important area that should be covered across accounting curricula, to expose changes
in the marketplace and to enhance the employability of graduates. This study also suggested
Professional accounting bodies seem to play a hegemonic inhibiting role through accreditation
requirements. Muda and Landau, (2019) they studies the Implementation Theory of Conservative
Accrual Accounting to the Quality of Accounting Information Systems which is influenced by
several variables including the effect of information technology use, user expertise and the
intensity of usage on the quality of accounting information and work motivation as the intervening
variable. The findings of this study showed that information technology use variable has a positive
effect on the quality of accounting information, user expertise variable doesn’t have a positive
effect on the quality of accounting information and intensity of usage variable have a positive
effect on the quality of accounting information at regional work unit. Albring, et al., (2014) was
investigate the relation between audit committee quality, corporate governance, and audit
committees' decision to switch from permissible auditor-provided tax services. This study found
that firms with more independent boards, audit committees with greater accounting financial
expertise, higher stock ownership by directors and institutions, that separate the CEO and
Chairman of the board positions, and with higher tax to audit fee ratios are more likely to switch

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to a non-auditor provider. Another study done by Phang, and Foong, (2010) examined the relative
efficacy of various Information Communication Technologies (ICTs) applications in facilitating
sharing of explicit and tacit knowledge among professional accountants in Malaysia. The findings
of this study indicate that ICTs, generally, facilitate all modes of knowledge sharing.
Wessels, (2005) this study revealed and identified which information and communication
technology (ICT) skills are critical for professional accountants who wish to be competent in the
current and future working environment. The findings of the study indicated that the ICT skills
required by professional accountants in order to be competent in today’s work environment. The
article concludes with a discussion of the ICT skills that professional accountants must be
competent in using. Omoteso et al., (2010) This study was explored the implications of the
relationship between ICT and auditing as well as the possible direction this relationship.The
study’s results reveal the current state of affairs of the relationship between ICT and auditing
against the backdrop of continuous global ICT sophistication thereby updating ICT audit literature
and the likely future direction of this relationship. A recent research by Janvrin, Bierstaker, and
Lowe, (2008) assessed the use and perceived importance of ICT instruments and techniques across
auditors from firms of audit of varying sizes. The study indicated that auditors do use ICT tools
and techniques in several areas such as documenting, sampling, analytical procedures, reporting
and web browsing. However, auditors’ use and perceived importance of these tools and techniques
vary by firm size. It also suggested that, although auditors perceive these tools and techniques as
being important, auditors do use them infrequently in their operations regardless of their clients’
ICT complexity. Although Janvrin et al.’s study is very recent, its central theme was to carry out
a general assessment of the current use of ICT by auditors and not to examine the impact its use
can have on auditors and the organizations they work for, a research void this study aims to fill.
Hostrom and Hunton (1998) argue that the assurance services provided by the auditing profession
are changing, especially with regard to organizations that are conducting business in virtual reality.
Upon close examination of the possible risks involved, the fundamental issue is that of control
over information and related technology. They see the integration of information technology in
curricula as a challenge to accounting educators, as the influence of information technology is
increasingly permeating international practice.

3. Methodology
This study examined the influence of ICT on auditing practices of accounting professionals. To
ease the estimation procedure, this study used a purposive sampling technique to select the required
respondents for the survey (Teddlie & Tashakkori, 2009). The sampling technique is applied by
selecting professional auditors from international auditing firms such as Big4, Grant Thornton, etc.
The total number of sample size for the survey is four professional auditors, which are selected as
the target respondents. The rationale for chosen the respondents is because of their experience and
basic knowledge in auditing and accounting in their practical applications within the selected
auditing firms. Through this medium, this study has developed a sustainable professional
experience with the respondents to enhance the quality of the questions and consequently the

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analysis, and to allow for follow-up questions and clarifications where needed. Respondents were
able to explain their views in details and discussed several issues which may be sensitive on a
confidential basis. The aim of using the interview method in this current study is to investigate
whether ICT influences on auditing practices.

4. Discussion
4.1 The impact of the ICT on Auditing Practices
Following the recent studies in the field of accounting and management(e.g., Cadez & Guilding,
2008; Jalaludin, Sulaiman, & Ahmad, 2011) to validate the results of the approach analysis, in the
third phase of the interview, the participants were asked to comment on the results with respect to
the effect of ICT on auditing and accounting practices. Most of the interviewees (four out of five)
agreed that the factors, namely type of software,confidence /awareness / competent levels of
auditing professionals and auditing challenges / risks facing by auditing professionals while using
that software were considered as vital contributors to the auditing and accounting practices. The
interviews indicated that these determining factors, which have been mentioned, have played a
very critical role in determining the ICT structure for auditing firms and consequently, enhancing
the auditing practices. Furthermore, the members of the selected auditing firms provided more
explanations on the link between the ICT and accounting and auditing practices. The professional
auditors from international auditing firms such as Big4, Grant Thornton, etc. Also provided some
suggestions that would allow the audit firms to deal with ICT Practices among auditing
professionals that they are using numerous applications in customized auditing software to audit
clients financial statements.

On the other hand, one of the interviewees believed and clearly claimed that there was direct
relationship between the ICT on auditing and accounting practices. On this point, the interviewee
illustrated that “It is very user friendly software which is based on a methodology called Horizon”.
However, it could be an issue for some auditors who consider use of ICT (auditing software)
procedures are derived based on the risks possible/significant risks identified. Like any software
it can be used by staffs in the assurance depth of all levels provided they get the required training.
Otherwise it’s a nightmare [...]” The interviewee further mentioned that the Clients Information
technology (IT) infrastructure are not that user-friendly to use those data for analytical purpose.
We have still a vast majority of clients in the small and medium segment using Tally Enterprise
Resource Planning (ERP). So, this is consistent with the study of Mazza, and Azzali, (2018) which
found that the impact of Information Technology Controls quality on control risk and auditing.

Majority of the interviewees were keen to see customized auditing software which they stressed
would better serve as a better auditing practices for auditing firms, instead of traditional or manual
way of auditing financial statements. One prominent professional auditor had strong reservations
about the “[…] lack of proper training is a huge challenge, [...] It’s time consuming software given
the lack of time for audits”. According to Wessels, (2005) the information and communication

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technology skills are critical for professional accountants to be competent in the current and future
working environment.
Accordingly, the auditing profession needs to develop talent and expertise to deliver consistent,
high-quality audit services in the coming environment, both through the hiring of outstanding
individuals and the training of auditors in new auditing technique (Baksaas, & Stenheim, 2019).
However, the effectiveness of ICTs in supporting knowledge creation and sharing depends largely
on the nature of knowledge needed to be acquired or transferred (Phang, & Foong, 2010).
When we asked them about the confidence /awareness / competent levels of auditing professionals
to use that software, three of the interviewees (professional auditors) concludes that the use of
customized auditing software is easy since most of them are professionally qualified. P1 for
example […] “see confidence level on software is depends on your professional ability. This type
of software guide you how to do an audit in a systematic ways and based on ISA (International
Standard on Auditing). But you have to use your professional judgment to complete an audit in a
proper way”. Another interviewee (P2) reiterated the importance of ICT technical […] “The audit
tools help identify the audit issues and are very effective to manage and mitigate the audit risk”.
Likewise, this result is consistent with Taiwo, (2016) and Muda and Landau, (2019), who claim
that auditing software is preferred to have high effect on acconting and auditng professionals for
auditing financial statements. A study in conducted by Wessels, (2005) indicated that the ICT
skills required by professional accountants in order to be competent in today’s work environment.
One of the interviewees expressed their concern about the use of customized auditing software are
required theoretical and training knowledge to do auditing of financial statements, […] “As
highlighted above, lack of proper training is a huge challenge. Above all, it’s time consuming
software given the lack of time for audits. Depending on job market restrictions, the pressure to
close assignments is huge especially in Middle East countries where recruitment costs are high. If
you are asking for specific challenges within the software they can be broadly be classified into
many countries.Then he distinguished that […] “The software does not distinguish between small,
medium and large entities, due to which we may be forced to perform sometimes unnecessary
procedures only for the sake of doing it”. He mentioned about facilities [...] “Clients IT
infrastructure are not that user-friendly to use those data for analytical purpose. We have still a
vast majority of clients in the small and medium segment using Tally ERP”. This result is consistent
with some of the previous studies (Janvrin, Bierstaker, & Lowe, 2008; Hostrom, & Hunton, 1998).
Generally, the result of the semi-structured interviews was consistent with and validated the
qualitative findings presented which found that all factors (customized software) had significant
impact on practices among accounting and auditing professionals.

5. Implications
The study findings highlighted earlier leads to several implications. First and foremost, the findings
enrich the ICT for accounting literature. Furthermore, this study added a new discussion, i.e.
auditing professionals and its relationship with the customized auditing software. This study would
be useful to auditing firms in taking into consideration the customized auditing software that will

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enhance the professional auditing practices, as the study findings indicated some customized
auditing software significantly affect the professional auditing practices. This however implies
that, when customized auditing software are properly implemented with applicable accounting and
auditing standards, the professional way of auditing will be improved. Thus, this improved
customized auditing software will enhance the professional approach of auditing practices for
auditing firms and consequently improved the efficiency of auditors and fairness of financial
statements. As well as this current study may assist the policy makers in central banks in general,
and professional institutions and government in particular, to set wise and deliberate policies
related to auditing risks.

6. Conclusion
Based on the literature review and interviews, this study identifies the variables to be examined
ICT (customized auditing software) and accounting or auditing professionals.There was no past
qualitative research that had attempted to empirically investigate the relationship between ICT
(customized auditing software) and accounting or auditing professionals. This study therefore, has
evaluated this phenomenon and explore the literature with greater effort to determine the
customized auditing software and evaluates the relationship between the accounting and auditing
practices among auditing firms. Also, this study has made a contribution to the body of literature
concerning the influence of the ICT and the auditing professionals among numerous audit
firms.The results have further revealed that the customized auditing software exerts a significant
impact on the increase of efficiency of current auditing practices. Meaning that, there is a strong
relationship between the ICT and the auditing of financial statement using software. This is
significant for at least three parties, i.e. clients, professional institutions and other relevant
authorities, to strategize on encompassing the existence of professional auditing practices in audit
firms by controlling the selected characteristics of ICT, hence make professional institutions that
are more compliant to the accounting and auditing standards. Furthermore, it is recommended for
future studies to apply quantitative methods such as case studies specifically on each of the
independent variables and moderators to better understand the customized auditing software in
audit firms. In addition the researchers can study various other challenges facing by current
auditing professionals in order to invent customized software which can support TALLY and ERP.

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