The rise of technology-enabled data analytic tools creates opportunities for firms to improve audit quality related to complex estimates. To combat auditors’ resistance to using technology-enabled tools, firms may promote the sophistication of such tools to their audit staff. However, there is a paucity of research that has examined how auditors’ perceived sophistication of an analytic tool impacts judgments about audit evidence. We conduct an experiment and find that, holding all other information constant, the preferences of an audit supervisor interact with the perceived sophistication of an analytic tool to jointly impact auditors’ anticipated evaluation from a supervisor and, in turn, their evidence assessment decisions when auditing a complex estimate. As such, the promotion of tool sophistication by audit firms can significantly affect the audit of complex estimates to a greater degree than what would be expected. Implications for audit theory and practice are discussed.
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Research Article|
October 25 2022
Is sophistication always better? Can perceived data analytic tool sophistication lead to biased judgments?
Jared Koreff
;
Jared Koreff
Trinity University
Accounting
1 Trinity Place
UNITED STATES
San Antonio
TX
78258
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Stephen Perreault
Stephen Perreault
Department of Accountancy, Providence College, 1 Cunningham Square, Providence, RI 02918, sperreau@providence.edu
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Received:
February 16 2022
Revision Received:
August 30 2022
Accepted:
October 05 2022
Online Issn: 1558-7940
Print Issn: 1554-1908
2022
Journal of Emerging Technologies in Accounting (2022)
Citation
Jared Koreff, Stephen Perreault; Is sophistication always better? Can perceived data analytic tool sophistication lead to biased judgments?. Journal of Emerging Technologies in Accounting 2022; https://doi.org/10.2308/JETA-2022-010
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Behavioral Research in Accounting (BRIA) publishes theoretical and empirical research concerning how accounting affects and is affected by individuals and organizations.
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