The Impact of Computerized Auditing in Reducing Audit Risks in Jordan

The impact of computerized auditing in reducing audit risks in Jordan
Abstract: Main focus of this study is to find out the significance of the variety of training
programs for employees, as well as analyzing importance of accounting information systems
within the computerized audit programs in reducing audit risks that associated with IT audit in
Jordanian audit firms. The descriptive statistical method was used, a random sample of sector
audit firms was selected and the sample consisted of (50), an accountant, had been randomly
recruited to fill the questionnaire. The results indicated that the software used in the
computerized audit ensure good financial performance, and the staff were well trained and fully
qualified for working in the accounting and IT system that is related to the audit it found that
the accounting information systems used in top ten Jordanian audit firms reduce risks relevant
for accounting and ensure good performance. The study recommends the necessity of working
to provide extensive protection programs for computerized audit firms, in addition to work on
supporting staff training courses that increase the expertise of auditors to deal with the risks
occurring.
Keywords:Audit Risks, Computerized Auditing, Audit Programs.
1. INTRODUCTION
The rapid development of information technology and accessibility to this information has led
to the increasing number of users of this technology, either from individuals or companies. The
cravings of the Companies to acquire and apply the computerized systems and programs
contributed effectively in the effective deployment of information systems. The most essential
field that has been impacted through this transform is the accounting, where the second half of
the remaining century witnessed a rapid transition in the direction of using automated
accounting statistics structures which lead to robust development in the performance of the
clerical and accounting related task especially in the process of computerized auditing.
But with the use of advanced technology exposure in the direction of different kinds of risks
related to make Suring the safety as well as security of computerized accounting information
systems. Additionally, the huge development within IT is not accompanied through a
comparable development within the competencies as well as capacities of the human users of
this technology. That creates a kind of risks which bound the efficiency and competence of the
make use of these techniques (Al-Akra, Abdel-Qader and Billah, 2016).
These risks or uncertainty need from the organizations to be extra conscious of the possible
safety risks that intimidate the safety of their systems, the competence and efficiency of the
software used in the process of computerized auditing, avoid these risks as well as decrease
from its bad impacts as much as possible.
The IT infrastructure that is developed by any company plays a vital role in assisting in
transforming accounting operations. Information technology has an important and significant
role in process of gathering, using and storing useful information that is abridged and reported
within financial reports. Large numbers of business are becoming progressively more relay on
information technology by means of such components at the same time as fully included (IS) As
well as the electronic document management flattering more common. It is commonly observed
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that during processing of accounting information employees make a lot of mistakes. In order to
avoid such kind of mistakes steps can be taken like IT infra can be evolved which will assist
managers in improving accuracy in accounting operations, transaction processing speed also
increase which save time and energy. Overall, it can be said that IT system help firm in multiple
ways. In contrast, There are numerous kind of risk that are mainly related with information
technology such as loss of computer assets, maximized risk of fraud, mistaken record keeping,
competitive disadvantages if the incorrect information technology is chosen, loss of information,
business disruption and privacy violations. (Alhosbanand Al-Sharairi, 2017).
1.1 Study Problem
The fast evolution of in IT which uses computers has its impact on accounting as well as
management systems of an organization. This was followed by a essential alteration within the
research methodology, methods, systems auditing, internal and external oversight, this has also
affected the personal configuration and training of people compared with what the matter was
under the traditional way of manual data entry, (Alqtish, Alqirem and Kasem, 2018). In Jordan
there is a gap in research bodies that investigate the impact of computerized auditing in
reducing audit risks among audit firms.
In this research we will try to answer the following questions.
1. What are the types of computerized auditing programs that are used in Jordanian audit
firms?
2. What is the importance of employees training on computerized auditing programs in
Jordanian audit firms?
3. What is the impact of using computerized auditing programs in reducing audit risks?
1.2 Study Objectives
Computerized audit that is being prepared according to certain accounting policies “as defined
by the ICAS” aims to help the auditor to express his opinion about it.
The research aims to:
 Identify types of computerized auditing programs that are used in Jordanian audit firms.
 Identify the importance of employees training on computerized auditing program in
Jordanian audit firms.
 Identify the impact of using computerized audit programs in reducing audit risks in
Jordanian audit firms.
1.3 Study Hypotheses
In light of the problem and objectives of research, the following hypotheses were formulated:
H01: There is no statistically important relationship between using computerized auditing
program types and reducing audit risks.
H02: There is no statistically significant relationship between employees training on the
computerized audit programs and reducing audit risks.
H03: There is no statistically significant relationship between using computerized audit
programs and reducing audit risks.
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2. THEORETICAL FRAMEWORK AND PREVIOUS STUDIES
The ICT is very important in modern business organizations in support of achieving short as well
as long term objectives. (Alqudah, Amran and Hassan, 2019), Stated that the technology has
been a significant tool in almost all human activity. The influence of Information technology
within business organization has developed exponentially within recent years, varying the
procedure of audit and outputting in both challenging and opportunities for auditors.
A study was conducted by (Al-Rahamneh, 2016), studied the effect of automated accounting
systems over audit risk management within public organizations in Kisumu County. Evolution in
information technology has had a dramatic impact over accounting facts machine. At the same
time as computer systems end up lesser, faster, easier in the direction of the use as well as
much less comfortable, the computerization of accounting function develops all the way
through the entire financial carrier sector. The result is massive, at the same time as indicated
via the coefficient of audit threat administration is significantly associated to evaluation and
identification of hazard, monitoring along with assessment manage awareness, attitude, belief
and generation. The tested system risk factors recognized essential areas of records device
hazard to be the risk of breaches within system security as well as the danger that the records
provided by means of the device is inadequate and the systems nature threat components
identified linked through the ones risk, in order to address systems risks components, auditors
require to analysis their ERP methods.
2.1 Information systems auditing
IT function is accountable for scheming, developing and keeping many of controls on business
processes of an organization.
IT has a significant role in gathering, processing as well as storing information that is described
and reported within financial statements (Alslihat and et. al. 2018).
2.2 IT Auditing
Information technology audit refers to the process of collecting as well as evaluating information
based on which an individual can estimate the performance of information technology systems,
i.e., to find out whether the information systems operations within the function of protecting
the property and keep the integrity of data, (Al-Tarawneh, Weshahand Humeedat, 2020)
Although there is no ordinary worldwide description of information system audit (Hassan &
Marston, 2019), has explained information system audit is introduced to the process under
which evidence are collected and evaluated to great extent to identify whether computer
system (IS) protect data and rightly make use of available resource.
(Alzoubi, 2018), has defined IS audit as “it is the procedure whereby controls of the entire
system are evaluated in proper manner. In this process reporting of efficiency level system
effectiveness and practices is done to communicate about data integrity. In the audit reporting
is also done about policy and rules in respect to use of system.” (Amoush, 2019), As an output,
business risk maximize. IT auditing is mainly needed in the company to ensure that IT system is
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secure and there are sufficient internal controls and make certain that assets managed by way
of those structures are appropriately safeguarded. The assessment of IS and IT by auditors has
generated the time period IT auditing. IT auditing is the evaluation of IT, practices, and
operations to assure the integrity of an entity’s data. Such assessment can include evaluation of
the performance, effectiveness, and economy of pc-primarily based practices. This entails the
usage of the laptop as an audit 20 device. The assessment need to also decide the adequacy of
internal controls within the IT environment to assure legitimate, dependable, and relaxed
records services. The Computer auditor’s evaluation of systems, practices, and operations may
include one or both of the following:
- Evaluation of entire control system that exists within IT environment of the company and to
ensure legality, consistency, and safety of data.
- Evaluate capability of the company IT system in monetary terms (Bshayreh, Tawaha and Al-
Khasawneh, 2019).
2.3 Objectives of IT Auditing
One of the main objectives of information technology auditing is to evaluate whether or not an
information System is meeting to the stated objectives of company and to make sure that the
system is not developing an intolerable level of hazard for the organizations. The terms
“attestation,” “audit,” and “control” typically point out same thing, however, context wise
meaning of these three become different. Thus, every time they can be used interchangeably.
One of the major advantages of using IT audit is that by using it one with full confidence can
ensure that IT system is working efficiently and effectively, in order to identify whether IT
system work efficiently one check whether inputs are generating accurate outputs correctly. It
can be ensured that only one that has permission can access IT system (Hussin, Saleh and Al-
smady, 2019).
IT auditing feature is essentially a support function for the attainment of conventional audit
targets. As has been described in advance, that IT auditing is the entire procedure where data is
first gathered and then it is evaluated in proper manner to ensure data integrity. If data will be
accurate then in that case more accurately decisions can be made by the managers at the
workplace.
2.4 The Need for the IT Audit Function
Computer technology is an essential and important for an organization because it will help them
in their financial transaction easily. With the elevated reliance on computer systems to carry out
each day transactions and with the higher dangers related to new generation, control wishes
assurance that the controls governing its pc operations are good enough. The Top Ten Reasons
for the Start Up of IT Auditing:
1. Auditing in the order of the computer was flattering unacceptable for the reason of
information reliance.
2. Dependence on controls was flattering extremely questionable.
3. Financial organizations were losing cash because of creative programming.
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