Computerized-audit competency and audit efficiency of certified public accountants (CPAS) in Thailand: mediating influences of audit judgment.

• Author: Poonpool, Nuttavong
• Position: Report - Survey

1. INTRODUCTION

   Paperless audits are no longer a thing of the future, but reflect the current state of auditing. As one information technology (IT) auditor states, performing audits without using information technology is hardly an option (Attaran, 2004). Auditors are faced with ever more complex, highly distributed financial information systems, supported by large databases where data is stored in thousands of data elements, and that retain transaction histories in electronic form only (Tsamenyi, Cullen et al., 2006). IT application controls have become increasingly pervasive within financial reporting processes as many of the controls over the initiation, processing and reporting of transactions that were previously considered purely "manual" have now been automated (Jelali, 2006). External and internal auditors are increasingly using computer assisted auditing techniques (CAATs) to perform a variety of audit procedures. CAATS, at a minimum, should perform tasks such as footing numbers, computing sample sizes, selecting sample items, scanning for unusual items, and computing financial statement ratios and trends for analytical procedures. Computerized-audit competency describes the work related skills and behavior needed to effectively perform in the role of audit functions formerly performed manually are now performed using standard financial accounting software, modified as necessary for a particular system(Liang, Lin et al., 2001). Generally, much of the same information is requested and analyzed as in a traditional audit. Once verified using computer techniques, data is retained so it can be used in other areas of the audit including error identification and segregation of transactions within accounts. Customized reports are generated by computer and a standard audit trail is maintained (Tan and Thein, 2001).

   The concept and process of Computerized-audit competency has become of increasing importance as its career development advantages have become more widely known. Computerized- audit competency can help task complexity on the accuracy of an audit judgment (Dowling and Leech, 2007). The audit judgment demonstrates that memory, knowledge, learning, cognition, and other mental processes of individuals play a significant part in the overall judgmental processes and affect their judgment and decision performance (Nelson, Ratliff et al., 2003). Hence, computerized-audit competency may lead to good audit judgment. Additionally, audit judgment is affected by several external and internal environment factors which influence its operations and practices such time pressure (Maule, Hockey et al., 2000).

   Auditor's judgment emphasizes selecting the auditing evident, decision making for auditor's report. Thus, auditors who are concerned with the quality of judgment will be the top of audit judgment. The audit judgment can build audit efficiency such as the probability that an auditor will both discover and truthfully report material errors, misrepresentation, or omissions in the client's material financial statement (Owhoso and Weickgenannt, 2009). Especially, the opportunity promotes a significant improvement in audit judgment by audit independent that will strengthen audit efficiency because reflected an auditor' unbiased mental attitude in making decisions throughout the audit and financial reporting (Perumpral, Evans et al., 2009).

   Developing models for the effects of computerized-audit competency on audit efficiency via audit judgment as mediator is a challenge as the literature on computerized-audit competency is vast, varied, and evolving. Yet, there was not any systematic testing about effects of computerized-audit competency on professional sustainability via audit judgment as mediator within Thailand and abroad. These have motivated researches to continue to develop improved models with research question.

   The purpose of this study is to test the effect of computerized-audit competency on audit efficiency via audit judgment as mediator. This research has extended from previous research and includes competent accounting information management; a detailed audit orientation; the best of fraud detective; and closely accounting practice monitoring will help researcher better understanding the scope and the activities associated with computerized-audit competency and allow researchers to test the consequences of computerized-audit competency. Second, this research tests audit judgment which is the mediating effect of the relationship between computerized-audit competency and audit efficiency. Third, this research tests time pressure which is the moderating effect of the relationship between computerized-audit competency and audit judgment. Forth, this research tests audit independence which is the moderating effect of the relationship between audit judgment and audit efficiency. Fifth, this research tests audit independence which is the mediating effect of the relationship between audit judgment and audit efficiency. Lastly, offering a validated instrument to measure computerized-audit competency, and by providing empirical evidence of the importance of computerized-audit competency on audit efficiency via audit judgment as mediator.

   This research will offer useful guidance for measuring and implementing computerized-audit competency and facilitate further research in this area. The research questions of this work are as follows: How does computerized-audit competency affect the audit judgment via time pressure as moderator? How does audit judgment affect to audit efficiency via audit independence as moderator? And how does audit judgment influence on audit efficiency via audit independence as mediator?

   The remaining part of this study is structured as follows: 1) The relevant literature on computerized-audit competency is reviewed. 2) The research method of the study is described, followed by a discussion of the empirical results. 3) The study ends with theoretical and managerial contributions, suggestions for further research, and conclusion.

2. RELEVANT LITERATURE REVIEWS

   The research model of this study is illustrated in Fig. 1. It shows that the effect of computerized-audit competency on audit judgment via time pressure as moderator.

   [FIGURE 1 OMITTED]

   Moreover, audit judgment also affects audit efficiency under audit independence. Further, the effect of audit judgment is also directly related on audit independence. And then, audit independence also is positive effluence on audit efficiency.

   2.1 Competent Accounting Information Management

   Competent accounting information management is also one of the key components of computerized-audit competency that helps auditor's report have reasoning fully documented. Computerized-audit competency requires reliable and accurate information about the area of care being investigated. Auditor need to have an effective data collection strategy in place before auditor start collecting data for auditing (Choe, 2004). Nothing is more frustrating than spending precious time collecting data to find that it is not what you wanted or collecting too much information that is unused. Auditor need to ensure that there is collect the correct information to meet auditing objectives and auditor's information is collected accurately and timely (Andon, Chong et al., 2010).

   Competent accounting information management refers to the process of combining the information in a convenient way which makes it easier to manage data and can be recovered or regained by auditor whenever needed (Knechel, 2007). Talking about data, these are essential in every minute of the business run. It becomes a necessity for all auditors to manage their precious data. Looking at the cost and other factors, these auditors prefer data management companies to manage their data (Zambon and Zan, 2000).

   Therefore, this study defines the meaning of competent accounting information management that it is the set of processes and technologies that support the collection, managing, and publishing of information with providing information to clients by preparing, analyzing, and verifying financial documents (Gil, Berenguer et al., 2008). The competent accounting information management is designed specifically for auditing and ensures that only the relevant information required for the audit is collected. Auditor need to ensure that the financial information is unambiguous, and this is especially important if auditor have several people collecting data, to prevent each person interpreting the form differently (Bushman and Smith, 2001). Financial information from previous audits on similar topics can be useful, either to use again or to give auditor ideas to develop auditor's client. When judges receive more information, both audit judgment's confidence and accuracy increase certainly (Mitri, 2003).

   The particular task is audit judgment, wherein an auditor must satisfy a complex information need, navigating several meetings in order to gain an understanding of how and why a given decision was made. Moreover, competent accounting information management has effluence on audit judgment because this research believe that both accuracy and confident of financial evident of firm help the judgment of auditor get well soon (Benford and Hunton, 2000). Especially, the impact of time perception processes on decision making under time stress, this research provides evidence that time pressure, even at a relatively high level, can reduce judgmental bias (DeZoort, Harrison et al., 2006). Thus, competent accounting information management seems to have a positive relationship with audit judgment. Therefore, we posit the hypothesis as follows:

   H1a: The higher the competent accounting information management of computerized- audit competency is the more likely that firms will achieve greater audit judgment.

   H2a: Time pressure will positively moderate the competent accounting information management of computerized-audit competency...