The Impact of Client’s Information Technology Capabilities on Audit Efficiency

• In Event: Auditing II

Abstract

This paper explores the question: Do companies with superior IT capabilities enjoy more efficient, i.e., lower cost, audits than those firms with less advanced IT capabilities? It employs data on companies that are listed on the Information Week 500 from 2003 to 2012 as a proxy for firms with superior IT resources. Controlling for factors found in prior research to influence audit fees, evidence suggests that superior IT capabilities reduce the rate of increase of a company’s audit fees. The implications of these findings and opportunities for additional research are discussed.

Authors

• R. Drew Sellers, Kent State University

• Benjamin Hoffman, Kent State University