TITLE : The antecedents of the use of continuous auditing in the internal auditing

context
AUTHOR : George C. Gonzalez a,b,⁎, Pratyush N. Sharma b,1, Dennis F. Galletta b,2
JOURNAL : International Journal of Accounting Information Systems 13 (2012) 248–26

1. Research problem or question

The concept of continuous auditing originated over two decades ago. Yet despite its much touted
benefits, its acceptance and use in practice has been slow. To gain insight into the state of affairs,
we surveyed 210 internal auditors worldwide on the status of their use of continuous auditing.
Using the Unified Theory of Acceptance and Use of Technology (UTAUT) we explore the
antecedents of internal auditors' intentions to use continuous auditing technology. Employing the
Partial Least Squares method, we find strong support for the model with an R2 of 44.3%.
Specifically, we find that internal auditors' perceptions of effort expectancy and social influence
are significant predictors of their intentions to use continuous auditing. We also find that annual
sales volume of the company and voluntariness of use significantly moderate the relationship
between performance expectancy and social influence respectively. Additionally, we find regional
differences in the significance of key UTAUT antecedents. Specifically, we find that the North
American internal auditors are more likely to use continuous auditing due to soft social coercion
pressures of Social Influence through peers and higher authorities. On the other hand, Middle
Eastern auditors are more likely to use the technology if it is mandated by the higher authorities.

Continuous auditing3 has been touted as offering many important benefits to organizations.
Among those benefits are the minimization of accounting errors, more timely analysis and
organizational communication, and increased audit efficiency and effectiveness. Various research
studies have explained the benefits of continuous auditing (Vasarhelyi et al., 2004; Kuhn and
Sutton, 2006), discussed technical aspects of implementing continuous auditing technology (Kuhn
and Sutton, 2010), explored actual implementations in practice (Hermanson et al., 2006), and
examined the psychological effects of continuous auditing on managers (Hunton et al., 2008,
2010).4 Yet while the concept of continuous auditing, first introduced by Groomer and Murthy
(1989) and Vasarhelyi and Halper (1991), is about two decades old, the actual practice of
continuous auditing has remained the exception rather than the rule (Alles et al., 2008; Chan and
Vasarhelyi, 2011). This puzzling lag in the actual use of continuous auditing is the primary
motivation for this study.

Use of continuous auditing technology has so far been almost exclusively limited to the internal
audit function (Chan and Vasarhelyi, 2011). Since 2005 some of the top international accounting
firms have surveyed their clients' Chief Audit Executives (CAEs) and other top internal audit
officers to gain an understanding of their continuous auditing practices (PricewaterhouseCoopers
(PwC), 2006,2007; KPMG, 2010; KPMG International (KPMG), 2010; Grant Thornton, 2011).
The results of these surveys vary in terms of how extensively continuous auditing was being used
in practice. For example, one survey showed that of the surveying accounting firm's clients, 13%
had a continuous auditing system that was fully operational and 37% had a system in place but
not yet fully developed (PwC, 2006). Another firm's survey indicated figures of 7% and 13%,
respectively (KPMG, 2010). A consistent theme among respondents of these surveys over the
years, however, is the uniform apparent optimism of the respondents, followed each time by
minimal usage of these technologies in the following survey: regardless of the level to which
continuous auditing had been used, the survey respondents expected a considerably higher level
of use in two years' time. Even in the face of repeated optimism expressed by survey respondents,
it appears that the implementation of continuous auditing has actually advanced very slowly. This
again raises the question of why there seems to be a lag in the use of continuous auditing

Given the potential benefits of continuous auditing, some of which were previously mentioned
(also see: Deebreceny et al., 2005; Flowerday and von Solms, 2005; Kogan et al., 1999; Rezaee et
al., 2002; Vasarhelyi et al., 2002), this lag is puzzling. We thus set out to gain insight into this
 state of affairs by conducting an online survey of industry practitioners' internal audit practices
and analyzing their responses through the lens of the Unified Theory of Acceptance and Use of
Technology (UTAUT) from the Management Information Systems (MIS) discipline (Venkatesh
et al., 2003). UTAUT provides a theoretical framework upon which to assess the use of a
particular type of technology. In this study, we find that the UTAUT model explains a substantial
amount of variance in the intentions to use continuous auditing. Most importantly, we find that
perceptions of effort expectancy and social influence are significant predictors of internal
auditors' intentions to use, while performance expectancy and facilitating conditions are not.
Annual sales volume of the company and voluntariness of use significantly moderate the
relationship between performance expectancy and social influence respectively.Our paper is
organized as follows. In the next section we briefly present an introduction to the UTAUT
framework. Subsequent sections present our research model and hypotheses, discuss our data
collection method, and outline the data analysis procedure and the results of model testing. Finally
we conclude with a discussion of our findings and implications for practice.

2. Why is problem/question important?

Karena lambatnya implementasi continuous audit sedangkan potensi manfaatnya sangat besar

3. Author’s approach to solving the problem

survei 210 auditor internal di seluruh dunia tentang status penggunaan audit berkelanjutan mereka
4. Assumptions about real world

5. Relevant theories
Unified Theory of Acceptance and Use of Technology

6. Hypotheses
we expect six constructs to play a significant role in internal auditors intentions to use continuous
auditing technology: effort expectancy, performance expectancy, facilitating conditions, social
influence, voluntariness of use and annual sales of the company. In the remainder of this section,
we define each of the determinants, specify the role of key moderators (voluntariness and annual
sales), and provide the theoretical justification for the hypotheses

H1. Positive perceptions of effort expectancy will increase internal auditors' intentions to use
continuous auditing technology.
H2. Positive perceptions of performance expectancy will increase internal auditors' intentions to
use continuous auditing technology.
H3. Positive perceptions of facilitating conditions will increase internal auditors' intentions to use
continuous auditing technology.
H4. Positive perceptions of social influence will increase internal auditors' intentions to use
continuous auditing technology.
H5a. Annual sales will moderate the relationship between effort expectancy and internal auditors
intentions to use the continuous auditing technology.
H5b. Annual sales will moderate the relationship between performance expectancy and internal
auditors' intentions to use the continuous auditing technology.
H5c. Annual sales will moderate the relationship between facilitating conditions and internal
auditors intentions to use the continuous auditing technology.
H5d. Annual sales will moderate the relationship between social influence and internal auditors
intentions to use the continuous auditing technology.
The other moderating variable in UTAUT and our model is voluntariness of use. According to the
UTAUT model as depicted in Fig. 1, voluntariness of use only moderates the relationship between
social influence and behavioral intention. We maintain that aspect of UTAUT in our research
model. Therefore:
H6. Voluntariness of use will moderate the relationship between social influence and intention to
use the continuous auditing technology.
7. Dependent and independent variables

Dependent variable: effort expectancy, performance expectancy, facilitating conditions, social

influence

Independent Variable: internal auditors intentions to use the continuous auditing technology

Interverning, moderating, dan control variables : voluntariness and annual sales

8. Sample
The number of surveys e-mailed was 9013 and the number of usable responses was 210 (a
response rate of 2.33%

9. Statistical tests
menggunakan metode Partial Least Squares, kami menemukan dukungan kuat untuk model
dengan R2 sebesar 44,3%

10. Results
the results of this study's survey indicate that while some progress has been made, continuous
auditing systems are not yet used widely.
persepsi auditor internal tentang harapan usaha dan pengaruh sosial adalah prediktor signifikan
dari niat mereka untuk menggunakan audit berkelanjutan
Kami juga menemukan bahwa volume penjualan tahunan perusahaan dan kesukarelaan
penggunaan secara signifikan memoderasi hubungan antara harapan kinerja dan pengaruh sosial
masing-masing. Selain itu, kami menemukan perbedaan regional dalam pentingnya anteseden
utama UTAUT
11. Conclusions
auditor internal Amerika Utara lebih cenderung menggunakan audit berkelanjutan karena tekanan
paksaan sosial yang lembut dari Pengaruh Sosial melalui rekan kerja dan otoritas yang lebih
tinggi. Di sisi lain, auditor Timur Tengah lebih cenderung menggunakan teknologi jika
diamanatkan oleh otoritas yang lebih tinggi
we find that the North American internal auditors are more likely to use continuous auditing
due to soft social coercion pressures of Social Influence through peers and higher authorities. On
the other hand, Middle Eastern auditors are more likely to use the technology if it is mandated by
the higher authorities

Finally, our analysis suggests strong cultural differences among the critical antecedents affecting
internal auditors' intentions to use the system. North American internal auditors are more likely to
respond to soft coercion pressures created by positive Social Influence through peers and higher
authorities. On the other hand, Middle Eastern internal auditors are much more likely to use the
system if it is mandated by the higher authorities. Therefore, we suggest that different strategies
depending on the geographic location should be employed to help create the relevant kinds of
pressures on internal auditors to use the Continuous Auditing system. The prominence of Social
Influence and Voluntariness of Use concepts in our analysis suggests that the lag in the use of
Continuous Auditing systems can be readily explained by the lack of socially conducive or
coercive pressures in the auditing field.

12. Improvement/Extensions