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Introduction
Various computer assisted auditing tools and techniques (CAATTs) have been developed to assist auditors in performing audits on computerized accountancy data. Generalized audit software (GAS) is one of the most commonly used types of CAATTs ([31] Singleton, 2006; [34] Wehner and Jessup, 2005; [17] Debreceny et al. , 2005; [10] Braun and Davis, 2003; [27] Lovata, 1988). GAS is used by auditors to analyze and audit either live or extracted data from a wide range of applications ([17] Debreceny et al. , 2005). GAS is data extraction and data analysis software, which is designed to perform specific audit routines and statistical analysis. For example, it can browse, analyze, sort, summarize, stratify, sample and apply calculations, conversions and other operations to audit a full set of accounting data, as opposed to relying on sampling. While most audits now make use of electronic working papers, the audit process itself is often undertaken without the automation offered by GAS. Auditors still prefer to use traditional auditing procedures in forming an audit opinion based upon a sample of accounting transactions instead of testing all the available data.
While there has been previous research into the adoption of GAS, very little research has focused on its use for external auditing. Existing research either focuses on internal auditing, which has different objectives to external auditing, or on a mixture of internal and external auditing. This study intends to fill the gap in the research literature by evaluating the nature and extent of the utilization of GAS by external auditors.
Most large businesses, which have a turnover greater than £6.5 million or a balance sheet total of more than £3.26 million and an average number of employees more than 50, are required by law in the UK, i.e. The [14] Companies Act, 2006, to be audited by independent auditors annually. These large entities or even small and medium enterprises (SMEs) usually make intensive use of information systems for most of their business and their accounting records. Auditing companies that make use of computerized accounting is sufficient to warrant investment in GAS by external auditors. This study investigates the current usage and their perception of GAS by external auditors.
A web-based online survey has been used to gather the data from external...