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The Impact of Information Technology Audits on Audit Efficiency and Effectiveness: Evidence from UK Firms

Author

Listed:
  • Khalid, Hassam
  • Ahmad, Khalil
  • Ali, Amjad

Abstract

This study investigates the role of information technology audits in enhancing audit efficiency and effectiveness, focusing on empirical evidence from United Kingdom firms between 2016 and 2022. As firms become increasingly reliant on digital systems, the integration of information technology audit practices becomes a critical component of both internal and external assurance functions. The research utilizes a panel firm-level dataset and applies econometric techniques, including fixed-effects regression, to evaluate how variables such as automation tools, information technology audit integration, auditor competency, and information technology audit budget influence audit outcomes. The results indicate that practices like automation and integration have a statistically significant positive effect on audit performance. Additionally, budgetary allocation and information technology competency contribute substantially to audit efficiency and effectiveness. However, audit frequency alone does not show a strong correlation, highlighting the importance of strategic integration and audit quality over procedural repetition. The findings have practical implications for policymakers, audit practitioners, and organizations seeking to optimize audit functions in a digital environment. Recommendations include regulatory support for information technology audit adoption, increased investment in audit automation, and upskilling audit professionals in information technology competencies.

Suggested Citation

  • Khalid, Hassam & Ahmad, Khalil & Ali, Amjad, 2025. "The Impact of Information Technology Audits on Audit Efficiency and Effectiveness: Evidence from UK Firms," MPRA Paper 127542, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:127542
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    References listed on IDEAS

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    1. Zahid, Haider & Ali, Amjad & Audi, Marc, 2025. "Cryptocurrency Regulation and Financial Disclosure: Cross-Jurisdictional Evidence on Corporate Reporting Practices," MPRA Paper 127482, University Library of Munich, Germany.
    2. Khalid, Usman & Ali, Amjad & Audi, Marc, 2025. "Understanding Borrowing Behaviour in the EU: The Role of Mobile Payments, Financial Literacy, and Financial Access," MPRA Paper 127308, University Library of Munich, Germany.
    3. Yunis, Manal & Mirza, Nawazish & Safi, Adnan & Umar, Muhammad, 2024. "Impact of audit quality and digital transformation on innovation efficiency: Role of financial risk-taking," Global Finance Journal, Elsevier, vol. 62(C).
    4. Maryam Yousefi Nejad & Ahmed Sarwar Khan & Jaizah Othman, 2024. "A panel data analysis of the effect of audit quality on financial statement fraud," Asian Journal of Accounting Research, Emerald Group Publishing Limited, vol. 9(4), pages 422-445, August.
    5. repec:rfh:bbejor:v:14:y:2025:i:2:p:42-54 is not listed on IDEAS
    6. Arshi, Afifa & Ali, Amjad & Audi, Marc, 2025. "Evaluating the Impact of Sustainability Reporting on Financial Performance: The Mediating Role of ESG Performance and the Moderating Role of Firm Size," MPRA Paper 127480, University Library of Munich, Germany.
    7. Arshad, Idrees Ahmad & Ali, Amjad & Audi, Marc, 2025. "Evaluating Remote and Office-Based Work: A Multidimensional Analysis of Employee Outcomes in the Evolving Workplace," MPRA Paper 127312, University Library of Munich, Germany.
    8. Nicoleta Farcane & Ovidiu Constantin Bunget & Rodica Blidisel & Alin Constantin Dumitrescu & Delia Deliu & Oana Bogdan & Valentin Burca, 2023. "Auditors’ perceptions on work adaptability in remote audit: a COVID-19 perspective," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 422-459, December.
    9. Farras, Ashab & Ali, Amjad & Audi, Marc, 2025. "Advancing Audit Practices through Technology: A Comprehensive Review of Continuous Auditing," MPRA Paper 127319, University Library of Munich, Germany.
    10. Mohammed Muneerali Thottoli & Essia Ries Ahmed & K.V. Thomas, 2022. "Emerging technology and auditing practice: analysis for future directions," European Journal of Management Studies, Emerald Group Publishing Limited, vol. 27(1), pages 99-119, June.
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    14. Oktay Turetken & Stevens Jethefer & Baris Ozkan, 2020. "Internal audit effectiveness: operationalization and influencing factors," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 35(2), pages 238-271, January.
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    Cited by:

    1. Zahid, Haider & Audi, Marc & Ali, Amjad, 2026. "The Role of Cryptocurrency Regulations in Determining Financial Reporting Quality: An Empirical Analysis," MPRA Paper 129042, University Library of Munich, Germany.

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    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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