Audit Risk Attributes In Computerized Environments

Abstract

This study examines the relationship between important risk attributes of computerized accounting systems and the errors generated by those systems. The incidence and magnitude of errors are measured using misstatements detected by external auditors. We provide evidence that account classification, company size, information technology (IT) complexity, and the extent of IT within the accounting information system differentially affect the incidence of IT-related misstatements. Overall, these results indicate that the increased control facilitated by use of IT is not universal but that IT provides many benefits that should be considered by external auditors during the planning of an audit engagement.