The Effect of Information Technology and Facilitating Conditions on Audit Risk (Survey of Public Accounting Firms throughout Central Java)
##plugins.themes.EpsilonTheme.article.main##
Dewi Saptantinah Puji Astuti*
Leni Mardayanti
This study addresses the research gap concerning the factors influencing Audit Risk in Public Accounting Firms, particularly the limited empirical evidence on the roles of Information Technology and Facilitating Conditions. Audit risk arises when auditors issue inappropriate opinions on financial statements containing material misstatements, which can undermine financial accountability and stakeholder trust. This research investigates how Information Technology and Facilitating Conditions affect Audit Risk in Public Accounting Firms located in Central Java. Using a descriptive quantitative approach, data were collected via structured questionnaires from 60 purposively selected auditors with a minimum of three years of experience across various audit engagements. The variables measured include components of Audit Risk (Inherent Risk, Control Risk, Detection Risk), Information Technology (use of AI and cloud computing), and Facilitating Conditions (knowledge, resources, compatibility, and ease of use). Data analysis was performed using SPSS software, incorporating validity and reliability tests, as well as classical assumption tests such as normality, multicollinearity, autocorrelation, and homoscedasticity, followed by multiple linear regression analysis. The findings reveal that Information Technology has a negative but statistically insignificant effect on Audit Risk, while Facilitating Conditions exhibit a positive and significant influence. Collectively, both variables significantly impact Audit Risk. These results highlight the critical role of organizational support systems in mitigating audit risk, suggesting that improvements in facilitating conditions may be more influential than technology adoption alone in the context of auditing practices.
Al-Taee, S. H. H., & Flayyih, H. H. (2023). Impact of the electronic internal auditing based on IT governance to reduce auditing risk. Corporate Governance and Organizational Behavior Review, 7(1), 94–100.
Arens, A. A., Elder, R. J., & Beasley, M. S. (2011). Auditing and assurance services. Prentice Hall Upper Saddle River, NJ.
Askary, S., Arnaout, J. P. M., & Abughazaleh, N. M. (2018). Audit evidences and modelling audit risk using goal programming. International Journal of Applied Decision Sciences, 11(1), 18–35. https://doi.org/10.1504/IJADS.2018.088637
Bates, D. W., Cohen, M., Leape, L. L., Overhage, J. M., Shabot, M. M., & Sheridan, T. (2001). Reducing the frequency of errors in medicine using information technology. Journal of the American Medical Informatics Association, 8(4), 299–308.
Boynton, W. C., & Johnson, R. N. (2005). Modern auditing: Assurance services and the integrity of financial reporting. John Wiley & Sons.
Calderon, T. G., & Gao, L. (2021). Cybersecurity risks disclosure and implied audit risks: Evidence from audit fees. International Journal of Auditing, 25(1), 24–39.
Demirkan, H., Spohrer, J. C., & Welser, J. J. (2016). Digital innovation and strategic transformation. It Professional, 18(6), 14–18.
Fitzgerald, M., Kruschwitz, N., Bonnet, D., & Welch, M. (2014). Embracing digital technology: A new strategic imperative. MIT Sloan Management Review, 55(2), 1.
Francis, J. R. (2004). What do we know about audit quality? The British Accounting Review, 36(4), 345–368.
Haffke, I., Kalgovas, B. J., & Benlian, A. (2016). The Role of the CIO and the CDO in an Organization’s Digital Transformation. Thirty Seventh International Conference on Information Systems, Dublin 2016. https://www.researchgate.net/profile/Ingmar-Haffke/publication/311653140_The_Role_of_the_CIO_and_the_CDO_in_an_Organization’s_Digital_Transformation/links/5873514308ae8fce49238ec7/The-Role-of-the-CIO-and-the-CDO-in-an-Organizations-Digital-Transformation.pdf
Hartl, E., & Hess, T. (2017). The role of cultural values for digital transformation: Insights from a Delphi study. Twenty-Third Americas Conference on Information Systems, Boston, 2017. https://core.ac.uk/download/pdf/301371796.pdf
Karagiannaki, A., Vergados, G., & Fouskas, K. (2017). The impact of digital transformation in the financial services industry: Insights from an open innovation initiative in fintech in Greece. MCIS 2017 Proceedings. https://aisel.aisnet.org/mcis2017/2/
Kay, M., Santos, J., & Takane, M. (2010). Telemedicine: opportunities and developments in member states. Global Observatory for EHealth Series, 2.
Kiron, D., Kane, G. C., Palmer, D., Phillips, A. N., & Buckley, N. (2016). Aligning the organization for its digital future. MIT Sloan Management Review, 58(1).
Koutsoyiannis, D. (1994). A stochastic disaggregation method for design storm and flood synthesis. Journal of Hydrology, 156(1–4), 193–225.
Li, L., Su, F., Zhang, W., & Mao, J. (2018). Digital transformation by SME entrepreneurs: A capability perspective. Information Systems Journal, 28(6), 1129–1157.
Ling Keong, M., Ramayah, T., Kurnia, S., & May Chiun, L. (2012). Explaining intention to use an enterprise resource planning (ERP) system: an extension of the UTAUT model. Business Strategy Series, 13(4), 173–180.
Matt, C., Hess, T., & Benlian, A. (2015). Digital transformation strategies. Business & Information Systems Engineering, 57, 339–343.
Messier Jr, W. F., Glover, S. M., & Prawitt, D. F. (2017). Auditing & assurance services: A systematic approach. McGraw-Hill.
Moorthy, M. K., Mohamed, A. S. Z., Gopalan, M., & San, L. H. (2011). The impact of information technology on internal auditing. African Journal of Business Management, 5(9), 3523.
Mulyadi, R., & Wiyantoro, L. S. (2018). Pengaruh Facilitation Condition terhadap Niat Menggunakan Sistem Informasi Manajemen Hasil Pengawasan (SIM HP) dengan Harapan Usaha dan Harapan Kinerja Sebagai Variabel Intervening (Studi Kasus Pada Inspektorat Provinsi Banten). Jurnal Akuntansi: Kajian Ilmiah Akuntansi (JAK), 5(2), 118–131.
Nwankpa, J. K., & Roumani, Y. (2016). IT capability and digital transformation: A firm performance perspective. Thirty Seventh International Conference on Information Systems, Dublin 2016. https://www.researchgate.net/profile/Joseph-Nwankpa/publication/362751432_IT_Capability_and_Digital_Transformation_A_Firm_Performance_Perspective_Completed_Research_Paper/links/62fd3886ceb9764f72044c32/IT-Capability-and-Digital-Transformation-A-Firm-Performance-Perspective-Completed-Research-Paper.pdf
Panigrahi, C. M. A. (2020). Use of artificial intelligence in education. Management Accountant, 55, 64–67.
Remane, G., Hanelt, A., Wiesboeck, F., & Kolbe, L. M. (2017). Digital Maturity in Traditional industries-an Exploratory Analysis. ECIS, 10.
Rick, H., Dassen, R., Schilder, A., & Wallage, P. (2005). Principles of Auditing: An Introduction to International Standards on Auditing. Person Education Limited (UK).
Sangkala, M. (2024). Concept and Application of Audit in Information Systems. JOURNAL OF MANAGEMENT, ACCOUNTING, GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES, 3(3), 730–741. https://doi.org/10.55047/marginal.v3i3.1193
Sunaryono, R., Chandrarin, G., & Asih, P. (2019). The Effect of Audit Risk towards Audit Quality through Fee Audit. 21(8), 25–32. https://doi.org/10.9790/487X-2108022532
Vial, G. (2021). Understanding digital transformation: A review and a research agenda. Managing Digital Transformation, 13–66.
Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory. https://doi.org/10.4324/9780203968147.ch2f
Westerman, G., Calméjane, C., Bonnet, D., Ferraris, P., & McAfee, A. (2011). Digital Transformation: A roadmap for billion-dollar organizations. MIT Center for Digital Business and Capgemini Consulting, 1(1–68).
Whittington, R., Pany, K., Whittington, O. R., & Pany, K. (2010). Principles of auditing and other assurance services. McGraw Hill.
