The Research On The Effect Of Auditor IT Expertise On Audit Quality

Audit quality is the lifeline of audit work.High-quality audit work is an important guarantee for the quality of financial reports of listed companies.As the direct decision maker of audit process,auditors play a vital role in improving audit quality.At present,the development of information technology has promoted enterprises to continuously strengthen the application of digital technology.The 20th National Congress also mentioned that China should accelerate the pace of building a digital power.According to Accenture statistics,the digital transformation index of Chinese enterprises is increasing year by year.The improvement of enterprise digitalization puts forward higher requirements for auditors’ IT ability.Several accounting firms,such as Deloitte and KPMG,have issued announcements that they should pay attention to the training of auditors’ IT ability.Based on this background,this paper believes that the wide application of information technology in enterprises has brought higher challenges to auditors’ IT capabilities.Therefore,this paper explores whether the auditor’s IT expertise can improve the audit quality under the digital background,which can help the auditor reduce the possibility of financial restatement and accelerate the correction of financial misstatement of the audited entity.In the context of enterprise digital transformation,whether auditors have IT expertise has become an important personal characteristic.The existing research on the impact of auditor’s personal characteristics on audit quality mainly focuses on auditor’s gender,age,practice experience and auditor’s industry expertise,but not on auditor’s IT expertise.Therefore,on the basis of combing and summarizing relevant literature,combined with principal-agent theory,information asymmetry theory and signal transmission theory,this paper discusses the impact of auditors’ IT expertise on audit quality.This paper takes A-share listed companies from 2007 to 2021 as the research sample to conduct empirical research on the impact of auditors’ IT expertise on audit quality.The results show that:(1)auditors’ IT expertise helps to improve audit quality;(2)The role of auditors’ IT expertise in improving audit quality is more significant in enterprises with high degree of digitalization;(3)The role of auditors’ IT expertise in improving audit quality is more significant in enterprises that disclose IT-related internal control defects.In addition,this paper uses survival analysis regression model to further explore the relationship between auditors’ IT expertise and the duration of corporate financial statement misstatement.The study found that auditors with IT expertise can shorten the duration of misstatement of enterprise financial statements.Finally,based on the above research conclusions,this paper puts forward the following three policy recommendations:(1)accounting firms should timely update their understanding of auditors’ competence,pay attention to the acquisition and accumulation of IT knowledge in auditors’ practice,and increase the investment in the training of auditors’ IT professional knowledge;(2)For enterprises with high degree of digitalization,firms should give priority to auditors with IT expertise to improve the quality of project audit;(3)The government and regulatory authorities should pay more attention to the IT ability of auditors and put forward specific standards for the basic IT skills that auditors should have.The innovation of this paper is mainly reflected in the following three aspects.First,it enriches the existing research on auditor’s expertise and personal characteristics.Based on the background of enterprise digital transformation,this paper explores the impact of auditor’s IT expertise,the auditor’s personal characteristics,on audit quality,which conforms to the background of the current information technology era;Second,this paper builds the agent variable of auditor’s IT expertise through the accumulation of auditor’s experience in the audit practice,which can more accurately capture the auditor’s IT expertise at the individual level.The existing measurement method of industry expertise is mainly the industry market share method,which is only limited to measuring the auditor’s expertise in a certain industry.Under the background of digital transformation,there are trends and characteristics of digital transformation in all industries,The industry market share method cannot accurately capture the auditor’s IT expertise;Third,this paper further explores the relationship between audit IT expertise and the duration of corporate financial misstatement with the help of survival analysis model.The study found that auditor IT expertise can shorten the duration of corporate financial misstatement,accelerate the correction of corporate financial misstatement,profoundly reveal the impact of auditor IT expertise on audit quality,and enrich the existing research perspective of audit quality.