The Effect of the Adoptions of Automated Internal Control Testing Strategies on the Extent of External Auditor Reliance on the IAF

• In Event: Control, Audit and Information Systems Security

Abstract

This study examines various remediation strategies available for management to employ in response to deteriorated internal audit function work performance. Specifically, we examine whether implementation of continuous controls monitoring (CCM), Audit Commend Language on demand (ACL on demand), or more frequent manual controls testing results in greater reliance on the internal audit function. Our findings indicate that external auditors reduce planned audit hours in response to automated controls testing (i.e., CCM and ACL on demand)to a greater extent than more frequent, manual controls testing. The findings have implications for practice and contribute to AIS and auditing literature.

Authors

• Maia J Farkas, University of South Florida

• Rina Limor, University of South Florida