Foundation for Auditing Research
Technological innovations and the emergence of big data provide the audit profession with new opportunities to improve the audit process. For instance, with the help of new software solutions auditors are nowadays able to offer a continuous auditing and, thus, identify suspicious transactions, which need further investigation. However, interviews with auditors suggest that the number of items, which need manual testing, are still high. Moreover, the audit of client internal controls still remains a difficult task during the audit process because internal controls are highly context-specific and no clear evaluation criteria exist. Our study aims at investigating two interrelated themes: (1) Understanding the relevance of internal control quality for audit quality, and (2) identifying an information channel that (may) allow auditors to more accurately and efficiently assess internal control quality. In particular, our study intends to understand the role of internal control quality during the audit process and the relevance of information signals on fraud risk provided by financial analysts during earnings-conference-calls as a promising means to improve the auditor’s assessment of internal control quality.
The project team consists of: