The Association between Information Technology Investments and Audit Risk

• DOI: 10.2308/isys-51317
• Publication Date: 2015-10-21T14:08:01Z
• Authors: Shipeng Han; Zabihollah Rezaee; Ling Xue; Joseph H. Zhang
• Keywords: Audit risk; Association (psychology); Inherent risk (accounting); Internal control; Business risks; Financial Audit

ABSTRACT Advances in information technology (IT) have changed the way that companies conduct business, prepare their financial statements, and statements audited. On one hand, IT decreases audit risk by improving operation internal control effectiveness, which may decrease inherent risk. other complexity of introduces unconventional risks for auditors, especially creating challenges auditors when auditing effectiveness controls detecting accounting irregularities. Thus, relationship between clients' investments deserves research attention. Using data U.S. firms from 2000 to 2009, we find are positively related fees (and abnormal fees), probability auditors' issuance a going-concern opinion, likelihood Type II errors. Furthermore, auditor tenure moderates due learning effect.