The use of IT in sampling procedures within Maltese audit firms

Abstract

Purpose: Technology has been enhanced throughout the years, and auditors are taking advantage of this by conducting most of their work electronically. This dissertation focuses on the use of IT in relation to audit sampling procedures, studies the advantages and disadvantages thereof, as well as discerns whether the sampling risk is being reduced. It investigates the importance of technology when selecting transactions, and how sampling procedures are faster through use of CAATs. Design: The objectives of this study are achieved through conduct of semi-structured interviews with local big, medium-sized and small audit firms that use IT in their sampling procedures. The study analyses how IT is being used by these firms and whether a linkage is established with the secondary research obtained. Findings: All the firms studied attempt to use sampling techniques and software effectively to facilitate the way sampling is performed and most importantly, to control sampling risk. It is suggested that other techniques and CAAT packages could be used for the different requirements of an audit. It is also advised that training is adequately provided. Some audit firms prefer to use software for the design of the sample rather than its analysis. Nonetheless, it is suggested that human control must still be applied in conjunction with IT. Conclusions: It is concluded that audit firms are exceedingly dependent on technology. The Big Four are more favourable towards changes in technology and how to make use of it, in order to make their audits more efficient and less time-consuming. Values or Implications: Although there are certain drawbacks on the use of IT in sampling, the benefits outweigh the drawbacks, and if used appropriately, IT is beneficial for the entire audit as well.