The effects of computer assurance specialist competence and auditor accounting information system expertise on auditor planning judgments

While auditors' interactions with complex accounting information systems (AIS) and computer assurance specialists (CAS) play a critical role in determining audit quality (POB 2000), little prior research has examined these topics. This study investigates the effects of CAS competence and auditor AIS expertise on auditor planning judgments in a complex AIS environment. The audit literature has typically examined auditors' evaluations of evidence provided by sources with expertise structures similar to their own. However, the natural variation in knowledge structures that occurs between CAS and auditors likely results in a more complex relationship than those previously examined. Auditors were given a quasi-experimental case where the competence of the CAS was manipulated as high and low between auditors and auditor AIS expertise was measured. The case required auditors to evaluate evidence related to the audit of a complex AIS client to which a CAS had been assigned, assess current year inherent and control risks, and plan the nature, timing, and extent of substantive procedures for a transaction cycle. Results indicate that auditors possessing higher AIS expertise assessed both inherent and controls risks at higher levels and designed corresponding substantive tests that were greater in scope to mitigate those risks. For high AIS expertise auditors, both the quality of their risk assessments and the effectiveness of their scope of tests exceeded those of low AIS expertise auditors. Auditors were also sensitive to the reliability of CAS as an evidence source and assessed control risk higher when provided with control testing evidence from a CAS with low competence. When planning substantive procedures, auditors' AIS expertise levels moderated their reaction to CAS competence. Specifically, under conditions of low CAS competence, auditors with higher AIS expertise expanded the scope of their audit testing beyond the scope designed by auditors possessing lower AIS expertise. No such AIS expertise effect occurred under conditions of high CAS competence. These results suggest that auditor AIS expertise can play a significant role in complex AIS environments and in their ability to compensate for potential CAS competence deficiencies by increasing the scope of substantive tests.