The effect of adoption of computerized auditing on audit quality in Kenya

Abstract

The role of the computer has expanded greatly in many types of businesses and throughout many areas of those businesses. Audit firms have begun to integrate the computer into many more areas than just the standard use of word processing for generating letters and reports. Auditing as a profession has also been under a lot pressure to produce quality work, due to recent collapse of multinational corporations. There has been many researches done on audit quality, but none has handled the effects of computerized auditing on audit quality in Kenya. This study was undertaken to determine the extent of adoption of computerized auditing in Kenya and the effects of adoption of computerized auditing on Audit quality in Kenya. The study adopted descriptive survey research design. The target population was made up of 712 audit firms obtained from the Institute of Certified Public Accountants of Kenya ICPA (K). A sample was selected randomly to avoid bias. The study used primary data which was collected using questionnaires. A regression analysis was applied to the parameters to determine the effect of adoption of computerized auditing on audit quality. The findings from this study indicated that 26 firms out of the 105 respondents had adopted computerized auditing, and this can be regarded as relatively high. The study found that the challenges inhibiting the adoption of computerized auditing in Kenya were lack of proper computer trainings, lack of technical support, and the high cost of acquisition and maintenance of computer audit software and computer hardware. The vi findings of the study indicated a positive relationship between adoption of computerised auditing and audit quality. The study recommends that, managers should set aside resources for training and acquisition of computers and software for computerized auditing which will in turn improve audit quality. The government should also put policies in place that will ensure security of information and ensure safety of information in case of failures and breakdowns.