IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v65y2025i4p3347-3360.html

Emerging Technologies in External Audit and How They Are Challenging Auditors' Judgements and Decision‐Making Processes

Author

Listed:
  • Mohammed Alsaif
  • Duc Hong Thi Phan
  • Michael Kend
  • Mona Alharbi

Abstract

This study investigates how external auditors use heuristics to resolve complex audit matters when using audit data analytics (ADA). The use of ADA technologies, tools, and applications has led to the emergence of many challenges for the auditing profession, including those related to cognitive heuristics and auditor skills. Verbal protocol analysis and follow‐up interviews with the same 20 participants are methods used to collect data for this exploratory study. Our findings revealed that being overly reliant on easily obtainable information produced from ADA technologies can result in a loss of audit objectivity. The potential consequences include a decline in the quality of an external auditor's assessments and a potential decrease in the overall efficacy of the audit. We report the tendency of auditors to rely on the recollection heuristic, while utilising ADA technologies can be mostly attributed to their limited understanding of these ADA technologies, tools, and applications. Our analysis of participants' responses indicates that, despite the potential advantages of ADA, they preferred simpler programs like Microsoft Excel.

Suggested Citation

  • Mohammed Alsaif & Duc Hong Thi Phan & Michael Kend & Mona Alharbi, 2025. "Emerging Technologies in External Audit and How They Are Challenging Auditors' Judgements and Decision‐Making Processes," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(4), pages 3347-3360, December.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:4:p:3347-3360
    DOI: 10.1111/acfi.70043
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.70043
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.70043?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Abdalwali Lutfi & Hamza Alqudah, 2023. "The Influence of Technological Factors on the Computer-Assisted Audit Tools and Techniques Usage during COVID-19," Sustainability, MDPI, vol. 15(9), pages 1-22, May.
    2. Adrian Gepp & Martina K. Linnenluecke & Terrence J. O’Neill & Tom Smith, 2018. "Big data techniques in auditing research and practice: Current trends and future opportunities," Journal of Accounting Literature, Emerald Group Publishing Limited, vol. 40(1), pages 102-115, February.
    3. Philipp Henrizi & Dario Himmelsbach & Stefan Hunziker, 2021. "Anchoring and adjustment effects on audit judgments: experimental evidence from Switzerland," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 22(4), pages 598-621, February.
    4. Ruhnke, Klaus, 2023. "Empirical research frameworks in a changing world: The case of audit data analytics," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 51(C).
    5. Favourate y Mpofu, 2023. "The application of Artificial Intelligence in external auditing and its implications on audit quality? A review of the ongoing debates," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 12(9), pages 496-512, December.
    6. Seleshi Sisaye & Jacob Birnberg, 2010. "Extent and scope of diffusion and adoption of process innovations in management accounting systems," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 18(2), pages 118-139, June.
    7. repec:eme:jaar00:jaar-01-2020-0011 is not listed on IDEAS
    8. Dimitris Balios, 2021. "The Impact of Big Data on Accounting and Auditing," International Journal of Corporate Finance and Accounting (IJCFA), IGI Global Scientific Publishing, vol. 8(1), pages 1-14, January.
    9. Michael Kend & Lan Anh Nguyen, 2020. "Big Data Analytics and Other Emerging Technologies: The Impact on the Australian Audit and Assurance Profession," Australian Accounting Review, CPA Australia, vol. 30(4), pages 269-282, December.
    10. Joyce, Ej & Biddle, Gc, 1981. "Anchoring And Adjustment In Probabilistic Inference In Auditing," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 19(1), pages 120-145.
    11. repec:eme:jal000:j.acclit.2017.05.003 is not listed on IDEAS
    12. Bucaro, Anthony C., 2019. "Enhancing auditors' critical thinking in audits of complex estimates," Accounting, Organizations and Society, Elsevier, vol. 73(C), pages 35-49.
    13. Seleshi Sisaye & Jacob Birnberg, 2010. "Extent and scope of diffusion and adoption of process innovations in management accounting systems," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 18(2), pages 118-139, June.
    14. James C. Brancheau & James C. Wetherbe, 1990. "The Adoption of Spreadsheet Software: Testing Innovation Diffusion Theory in the Context of End-User Computing," Information Systems Research, INFORMS, vol. 1(2), pages 115-143, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Klerk, Charisa & Enslin, Zack & Hall, John, 2025. "Professional skepticism and behavioral bias in financial professionals," Journal of Behavioral and Experimental Finance, Elsevier, vol. 47(C).
    2. Jean Robert Kala Kamdjoug & Hyacinthe Djanan Sando & Jules Raymond Kala & Arielle Ornela Ndassi Teutio & Sunil Tiwari & Samuel Fosso Wamba, 2024. "Data analytics-based auditing: a case study of fraud detection in the banking context," Annals of Operations Research, Springer, vol. 340(2), pages 1161-1188, September.
    3. Favourate Y Mpofu & Queen Mpofu, 2025. "The application of digital technologies in external auditing: a double edged sword?," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 7(1), pages 39-56, January.
    4. Thomas Görzen, 2019. "Can Experience be Trusted? Investigating the Effect of Experience on Decision Biases in Crowdworking Platforms," Working Papers Dissertations 55, Paderborn University, Faculty of Business Administration and Economics.
    5. Arafat Hamdy & Ahmed Diab & Aref M. Eissa, 2025. "Digital Transformation and the Quality of Accounting Information Systems in the Public Sector: Evidence from Developing Countries," IJFS, MDPI, vol. 13(1), pages 1-22, February.
    6. Borba, Rafael Lucas & de Paula Ferreira, Iuri Emmanuel & Bertucci Ramos, Paulo Henrique, 2024. "Addressing discriminatory bias in artificial intelligence systems operated by companies: An analysis of end-user perspectives," Technovation, Elsevier, vol. 138(C).
    7. Raf Buyle & Mathias Van Compernolle & Eveline Vlassenroot & Ziggy Vanlishout & Peter Mechant & Erik Mannens, 2018. "“Technology Readiness and Acceptance Model” as a Predictor for the Use Intention of Data Standards in Smart Cities," Media and Communication, Cogitatio Press, vol. 6(4), pages 127-139.
    8. Arbel, Yuval & Ben-Shahar, Danny & Gabriel, Stuart, 2014. "Anchoring and housing choice: Results of a natural policy experiment," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 68-83.
    9. Huafeng Zhou & Zhejian Xiong, 2025. "Navigating the Digital Frontier: Inherent Mechanisms, Challenges, and Strategies for Sports Consumption Upgrade in the Digital Economy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 8687-8726, June.
    10. Sadok Mansour, 2007. "Modelisation Du Risque Dans Les Methodologies D'Audit : Apport Des De La Psychometrie," Post-Print halshs-00543217, HAL.
    11. Alaskar, Mohammad Zaid & Kim, Ja Ryong & Nguyen, Tam Huy & Rafique, Muhammad, 2025. "Balancing performance and ethics: Navigating visual recognition technology adoption in the auditing industry," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 59(C).
    12. Salonee Patel & Manan Shah, 2023. "A Comprehensive Study on Implementing Big Data in the Auditing Industry," Annals of Data Science, Springer, vol. 10(3), pages 657-677, June.
    13. Gavin Nicholson & Abdallah Bader Mahmoud Al-Zoubi, 2024. "The effect of decision recommendations and approval expectations on directors’ decision control: an experimental investigation of anchoring effects," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 35(3), pages 437-465, September.
    14. Sargent, Matthew J. & Winton, Bradley G., 2023. "Cognitive ability and performance in accounting students: The importance of data analytics assignments," Journal of Accounting Education, Elsevier, vol. 65(C).
    15. Teng, James TC & Fiedler, Kirk D & Grover, Varun, 1998. "An exploratory study of the influence of the IS function and organizational context on business process reengineering project initiatives," Omega, Elsevier, vol. 26(6), pages 679-698, December.
    16. Anca Pianoschi & Stefania Mierlita, 2025. "Revising ISA240 in a digital world: the sociomaterial perspective on fraud, technology, and stakeholder influence," Digital Finance, Springer, vol. 7(4), pages 921-947, December.
    17. Robert J. Kauffman & James McAndrews & Yu-Ming Wang, 2000. "Opening the “Black Box” of Network Externalities in Network Adoption," Information Systems Research, INFORMS, vol. 11(1), pages 61-82, March.
    18. Schniederjans, Dara G., 2017. "Adoption of 3D-printing technologies in manufacturing: A survey analysis," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 287-298.
    19. Xiaomeng Lucock & Victoria Westbrooke, 2021. "Trusting in the “Eye in the Sky”? Farmers’ and Auditors’ Perceptions of Drone Use in Environmental Auditing," Sustainability, MDPI, vol. 13(23), pages 1-20, November.
    20. Ani STOYKOVA, 2024. "AI in Accounting: Insights from a Bibliometric Analysis," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 5(8), pages 56-71, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:65:y:2025:i:4:p:3347-3360. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.