Audit software for data analytics, most commonly known as Generalised Audit Software (GAS), has been used by audit organisations since the deployment of IT in business organisations. The use and importance of GAS has increased with the growth in the sophistication and proliferation of IT within business organisations. Despite this development, recent studies have reported that GAS is still underused and identified that the factor contributing most to such underutilisation of GAS is access to organisational data.
Although the current state of GAS enables auditors to directly access data stored in databases, it is still uncommon for auditors to use this GAS capability. Auditors more commonly obtain organisational data from the auditees’ staff by using secondary storage devices. The audit literature has found problems associated with analysing auditee-provided data, for example, being presented with manipulated data and has, therefore, advocated the importance of having direct access to organisational data. The literature further claims that having direct access to organisational data would provide greater benefits to audit organisations from their investments in GAS through, for example, improved audit efficiency and effectiveness. The audit literature, however, provides limited empirical evidence to support such a recommendation.
This thesis seeks empirical evidence on the impact of having direct access to organisational data on the quality of auditor’s analytical tests as representing the dimension of actual audit quality. Drawing on the theory of flow, a supportive condition for innovative behaviour, this study posits that having direct access to organisational data facilitates the creation of a flow state. When auditors experience flow state, they are motivated to use GAS more innovatively. Further, as auditors’ innovative use of GAS increases, auditors are better able to identify successful applications of GAS that, in turn, improve the quality of their analytical tests.
This thesis uses a mixed-method approach involving both interviews and a survey to gather data to test its research hypotheses. The interviews and the survey targeted auditors with differing levels of seniority who have used GAS or are actively involved in using it for auditing. The results show support for the research model. The results indicate that, having a sense of control over the use of GAS, the ability to focus on interactions using GAS, the extent of auditors’ professional scepticism, and having knowledge/skills of GAS motivates auditors to use GAS innovatively. The results also indicate that, when the innovative use of GAS increases, the quality of analytical tests also increases.
Analysis of the impact of having direct, compared to indirect, access to organisational data shows a statistically significant moderating effect on the extent of auditors’ professional scepticism and on their ability to focus on their interactions with GAS. The results indicate that auditors’ professional scepticism increases, while their ability to focus on the interaction decreases when they have direct access to organisational data. Analysis of the effect of direct access also found no statistically significant difference in the quality of auditor’s analytical tests.
These findings enrich current discussion within IT auditing literature on the effectiveness of IT-based audit procedures to obtain audit evidence. This thesis demonstrates that innovative use of GAS is an appropriate link between IT-based audit methods and audit quality, a matter that has been barely elaborated. Additionally, this thesis identifies that the length of GAS experience affects both auditors’ preferences about type of data access (i.e., direct versus indirect access) and their perceptions of the benefits of data access on audit quality. Audit organisations might, therefore, conceive strategies to shorten the time required to realise the benefits of using GAS to directly access organisational data.