An examination of factors associated with investment in internal auditing technology

The purpose of this study is to explore whether various organizational, internal audit function and audit committee factors are associated with internal audit investment in audit technology.

The responses from 213 public and private company chief audit executives (CAEs) from seven Anglo-culture countries are analyzed from the Common Body of Knowledge (CBOK) 2015 Global Internal Auditor Practitioner Survey on specific questions addressing internal audit use of audit technology.

The results indicate that several of the studied factors are associated with investment in internal auditing technology, and taken together, suggest that CAE power may be the key driver in the technology investment decision. Furthermore, the data show that internal audit functions are not fully embracing the use of information technology (IT) tools and techniques, with average usage of ten of the eleven tools and techniques examined below moderate levels.

The results have implications for CAEs, boards and management when making resource allocation decisions. For example, the findings can be used in benchmarking an appropriate investment in internal audit technology, as well as identifying specific internal audit technology areas where further investment may be warranted. Additionally, insights provided by this study can facilitate a discussion about the value internal audit can add by increasing its investment in audit technology.

This study contributes to prior literature on internal auditing by filling a gap related to internal audit investment in audit technology, examining countries that are similar in culture rather than limiting the study to one country, and using several factors that have not been previously examined in prior internal audit investment-related literature. Additionally, the findings pointing to the important role CAE power appears to play in the internal audit technology investment decision provide several interesting new research avenues.