IMPACT OF INFORMATION TECHNOLOGY IN AUDITING PROFESSION ABSTRACT This study was carried out with the aim of appraising the impact of information technology in auditing profession. In order to actualize the objectives of the study, various literature and theoretical issues were discussed. The instrument used for the purpose of this research was gathered through primary source. The mass of information generated from the questionnaires was summarized in form of table and analyzed using simple percentage. The researcher administered one hundred (100) questionnaires to respondents, out of which eighty (80) were retrieved for the purpose of presenting and analyzing responses to issues raise in the questionnaires. The data collected was analyzed using Z-test statistical tool. The findings from analysis revealed among other things that accountants training bodies and institution should make the teaching of a course relating to information technology a prerequisite to qualifying student of accounting in all post secondary institutions. TABLE OF CONTENTS CHAPTER ONE: INTRODUCTION Background of the Study Statement of the Problem Objectives of the Study Hypothesis of the Study Scope of the Study Significance of the Study Limitation of the Study References CHAPTER TWO: LITERATURE REVIEW Historical Development of Computer Historical Development of Telecommunication The Emerge of Information Technology Information Technology and Auditing Computer System Uses of Computers Empirical Evidence References CHAPTER THREE: RESEARCH METHODOLOGY Introduction Research Design Population of the Study The Sample Size Data Collection Method The Research Instrument Data Analysis Method References CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION 4.1 Introduction 4.2 Descriptive Statistics 4.3 Test of Hypothesis CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION Introduction Summary of Findings Discussion of the Findings Recommendations Policy Recommendation Recommendation for Future Studies Conclusion Bibliography Appendix CHAPTER ONE INTRODUCTION BACKGROUND OF THE STUDY Competence in information technology (IT) is crucial for the professional accountants due to its pervasive use in the business world (IFAC, 2001). Today, almost every aspect of the accounting profession is being pervasively affected by advances in IT (Elliot, 2002). The extent, mode and quality of IT adoption in most enterprises have becoming more sophisticated and complicated, hence introduces new challenges and risks to the professional accountants (Scapens and Jazayeri, 2003). The integrated nature of Enterprise Resource Planning System (ERPS), for example, has not only changed the traditional role of accountants (Scapens and Jazayeri, 2003; Caglio, 2003) but has substantial impact on the internal controls of the adopting companies (Sayana, 2004). Undoubtedly, in the light of large scale business failure such as Enron, MCI-WorldCom and Parmalat, one of the most critical roles is auditing. To be effective, auditors need to embed technology in everything they do during the audit process, similar to the practices of their clients (Winograd et al., 2000; Janvrin et al., 2008). The increasing dependence of businesses on computerized information systems such as ERPS and ebusiness requires auditors to evaluate the reliability of computer generated data supporting financial statements and analyze specific programs and their outcomes (Abu-Musa, 2004). This is important as audit judgment influences the quality and effectiveness of audit (Bonner, 1999), while decisions tools may influence audit judgment (Janvrin et al., 2008). Hence, to effectively audit on-line systems, auditors need to incorporate on-line audit software as their primary audit tool and gather evidence electronically (Bierstaker et al., 2001). Auditors will no longer able to perform audit around the computer but to use new technology to gain audit efficiency and effectiveness. In addition, IT auditors need to examine the adequacy of controls in information systems and related operations to ensure systems effectiveness (Zhao and Yen, 2004). Therefore, auditors would normally be expected to have higher level of IT knowledge and skills than the average accountants since they must audit the work of many different clients with diverse information systems (Greenstein-Prosch et al., 2005). This study is therefore carry over to examine the impact of information technology in auditing profession in Nigeria. STATEMENT OF THE PROBLEM The development of Information technology and the consequent development of various softwares applicable to auditing professions have compelled different organization to look out for computer literate auditors. The introduction and installation of information technology on auditing professions may be a white elephant project in an organization if there are no seasoned auditors who are vast in information technology or who are computer literate. This has in turn led different auditing training bodies and institution to incorporate computer training as a prerequisite to qualifying students as accountants/auditors. Information technology being a useful tool has made auditors now embark on rigorous computer training so as to be in tune with modern auditing techniques brought about by information technology. Information technology in Nigeria is just growing and it has been on the upward trend due to its invaluability. However we have not attained the expected level and hence the application of information technology in Nigeria are not without its attendant problem, hence the following questions are raised: Has the introduction of information technology in auditing profession enhanced the timely production of auditing reports? Has the information technology in auditing profession improved the quality and accuracy of auditing reports? Are the benefits derived from information technology in auditing profession justified by the huge amount invested in it? To what extent has information technology enhance the detection and control of fraud? OBJECTIVES OF THE STUDY The general objective of the study is to determine the impact of information technology in auditing profession. The specific objectives are to: find out if information technology in auditing profession has enhance timely production of auditing report. find out if information technology in auditing profession has improved the quality and accuracy of auditing reports. find out if the benefit derived from information technology in auditing profession justifies the huge investment in it. HYPOTHESIS OF THE STUDY The following hypotheses will be tested in the course of this study. Hypothesis I Ho: Information technology has not enhanced timely production of auditing report. H1: Information technology has enhanced timely production of auditing report. Hypothesis II Ho: The benefit derived from Information technology in auditing profession does not justify the huge investment in it. H1: The benefit derived from information technology in auditing profession justify the huge investment in it. Hypothesis III Ho: Information technology in auditing profession has not improved the quality and accuracy of auditing reports. H1: Information technology in auditing profession has improved the quality and accuracy of auditing reports. SCOPE OF THE STUDY The research work covers the impact of information technology in the auditing profession. The population of this study comprises of all auditors operating in Nigeria, while the sample size is restricted to auditors of selected banks. The time frame for this study is five years (2007 – 2011) Geographically, the study will be conducted in Benin City, Edo State. SIGNIFICANCE OF THE STUDY The linkage of information technology on auditing profession has been a subject of discuss among technologists, accountants and body of accountants. Information technology when applied to auditing profession has been argued will lead to fasten and more efficient accomplishment of auditing task. Different auditor can also assess valuable information from the same source at the same time or different times through database Information technology to say the least has actually widened the horizon of auditing profession and realm of auditing profession. This research work will go a long way in analyzing the impact, importance and usefulness of Information technology provides reliability and efficiency, which aid the work of professional accountants. LIMITATION OF THE STUDY Computer illiteracy that is quite prevalent among many Nigerian auditor and so this is seen as the major limitation of the study. REFERENCES Caglio A (2003). “Enterprise Resource Planning systems and accountants: towards hybridization?” Eur. Account. Rev. 12(1): 23-153. Janvrin D, Bierstaker J, Lowe DJ (2008). An examination of audit information technology use and perceived importance, Account. Horiz. 22(1): 1 – 21. Sayana SA (2004). “Auditing security and privacy in ERP applications”, available at http://www.isaca.org/Content/NavigationMenu/Students_and_Educators/IT_Audit_Basics/IT_Audit_Basics_Auditing_Security_and_Privacy _in_ERP_Applications.htm (accessed 12 July 2007). Scapens RW, Jazayeri M (2003). “ERP systems and management accounting change: opportunities or impacts? A research note”, Eur. Account. Rev. 12(1): 201-233. Winograd BN, Gerson JS, Berlin BL (2000). “Audit practices of Pricewaterhouse Coopers”, Auditing: J. Pract Theor. 19(2): 175-182.
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