Financial Auditor and Specialist IT Auditor Relationships in Financial Statement Audits

• In Event: Perceptions from Practice

Abstract

As companies increase reliance on information technology in business and financial statement processes, the use of specialist IT auditors has become increasingly important; yet regulators have expressed concerns regarding the level of understanding obtained by financial auditors in specialist domains. Currently, little is known about how financial and IT auditors work together and the impact of those interactions on audit outcomes, despite evidence of financial auditor shortcomings in IT areas. Drawing on multi-disciplinary team research and social identity theory, we conduct interviews with audit practitioners to describe factors that influence the relationship between financial and IT auditors and how the nature of this relationship impacts the financial statement audit process and outcomes. The results of our interviews provide evidence that the potential exists for a strong team identity between financial and IT auditors, however the collective audit team concept is incomplete and dysfunctional coordination between the two groups may result. Our findings provide a foundation for academic researchers to identify important research issues, develop theory-based predictions, and design experiments (or other models and instruments) to address these issues. Our study also has broad implications for future research in other audit specialist areas, such as tax and valuation.

Authors

• Tim David Bauer, University of Illinois at Urbana–Champaign

• Cassandra Ruth Estep, University of Illinois at Urbana–Champaign