The Medium is the Message: The Affective Role of Technology in Auditing

• In Event: SET Audit Data and Data Standards

Abstract

With the changes in the understanding of what technology can and cannot do in auditing as well as the rapid developments in such underlying technologies as Enterprise Resource Planning (ERP) systems, digital communication and analytics it is an appropriate time to revisit the role of technology in auditing and develop a framework for guiding the next stage in the evolution of that ongoing process. Our model combines the frameworks of Alter (2006, 2013) and the literature on affect to define auditing as an affective information work system in which both human and IT resources are combined to affect the perceived credibility and reliability of the audited financial statement. To be precise, perceived credibility is a joint function of “technology driven assurance” (TDA) and “human based assurance” (HBA). TDA exploits the capabilities of technology in capturing, transmitting, storing, retrieving, manipulating and displaying of information while HBA reflects the inherent cognitive capabilities and abilities of the [human] auditor. The key point of our paradigm of auditing as an affective work system is that it creates a dynamic perspective on auditing in which the role of technology inexorably increases as its capabilities rise at a faster rate than the cognitive capabilities of audit personnel. Eventually this dynamic may lead to situation where the fundamental source of assurance as far as users are concerned shifts from being based on the presence of an independent third party human auditor facilitated by technology to trust being placed in the audit technology itself. This outcome of “technology based assurance”, which is contrasted to the earlier stage of “technology driven assurance” builds on the thinking of Marshall McLuhan that “the medium is the message” (McLuhan and Fiore, 1967) and the literature on affect (Leys, 2011; Thrift, 2004; Shouse, 2005; Clough, 2008; Clough and Halley, 2007; Gregg and Seigworth, 2009)

Authors

• Michael G Alles, Rutgers Business School

• Glen L Gray, Cal State University - Northridge