Abstract
The growing use of Information Technology (IT) systems in businesses necessitates the hiring of auditors who have IT knowledge and abilities. An external auditor’s competence in IT ensures that the audit is run professionally and effectively. This study investigates the information technology requirements of external auditors in South Africa. It followed a literature review, and an analysis of results from a questionnaire.
The objectives of this study were to: (1) identify which aspect of the audit process requires the application of IT; (2) ascertain the current state of IT knowledge among external auditors; and (3) determine what can be done to improve the IT knowledge of external auditors.
The literature review focused on exploring the importance of IT in the context of an external auditor. It also concentrated on identifying the types of IT knowledge and skills that are important to the external auditor. The driving forces behind implementing IT in audits are also discussed.
This study followed a quantitative research approach. Data was collected using a questionnaire, and analysed using descriptive statistics. A total of 62 external auditors from three small to medium-sized audit firms completed the questionnaire, accounting for a 73% response rate. The results reported in the study show that the respondents believed that the IT proficiency of external auditors is currently low. Although IT specialists are involved in the audit process, there is still insufficient discussion between the external auditor and the IT specialist. The respondents also believed that audit firms are responsible for creating an environment that is conducive, both in providing time and resources, to allow the external auditors to upskill themselves with the necessary IT knowledge and skills. The results of this study are important, as they provide insight into the perspectives of external auditors with regards to their IT knowledge and skill when conducting audits. As such, a number of recommendations are provided to audit firms, regulators, and professional accounting bodies.
KEY WORDS
External auditor, Information Technology, auditing, skills, audit firms