An examination of auditor planning judgements in a complex accounting information system environment

In complex accounting information system (AIS) environments, auditor planning judgements are affected by the quality of work supplied by both computer assurance specialists (CAS) and auditors. Prior research has indicated that there are concerns about CAS competence in practice, and the profession has acknowledged that auditors need to expand their expertise in the AIS domain. In this study, we investigate the effects of CAS competence and auditor AIS expertise on auditor planning judgements in a complex AIS environment. We find that both CAS competence and auditor AIS expertise significantly affected auditor risk assessments. More importantly, auditors' AIS expertise levels moderated their ability to effectively incorporate CAS evidence into their planned substantive testing. Specifically, when CAS competence was low, auditors with higher AIS expertise effectively expanded the scope of their audit testing beyond the scope set by auditors with lower AIS expertise. The effect of AIS expertise diminished when auditors received evidence from a highly competent CAS. A mediation analysis indicates the ability to identify potential AIS-specific risks as a mechanism behind the moderating effect of auditor AIS expertise. Our results suggest auditors' AIS expertise can play a significant role in complex AIS settings and in their ability to compensate for CAS competence deficiencies.