Effect of Information and Communication Technology on Audit Findings Accuracy: Evidence from Audit Firms in Southwest Nigeria

Abstract

The persistence of inaccurate audit reports continues to pose significant challenges to stakeholders, regulatory bodies, and the broader financial ecosystem in Nigeria. Despite the promising potential of Information and Communication Technology (ICT) in addressing these challenges, existing literature presents conflicting findings regarding ICT's impact on audit performance, with most studies focusing on internal auditing or specific sectors, leaving a notable gap in understanding ICT's broader implications for external audit firms in developing economies like Nigeria. This study examined the effect of Information and Communication Technology tools on the accuracy of audit findings among audit firms in Southwestern Nigeria. Specifically, the research investigated the influence of Automated Audit Procedures (AAP), Cloud-Based Audit Software (CAS), and Mobile Audit Applications (MAP) on audit findings accuracy. The study adopted a survey research design targeting 1,123 active audit firms licensed by the Institute of Chartered Accountants of Nigeria (ICAN) in Southwestern Nigeria. Using a sample size of 358, data collected through structured questionnaires was subjected to multiple regression analysis to test the hypotheses. Findings revealed that all three ICT tools significantly and positively influenced audit findings accuracy. Automated Audit Procedures emerged as the strongest predictor (β = 0.214, p < 0.000), followed by Cloud-Based Audit Software (β = 0.186, p < 0.005) and Mobile Audit Applications (β = 0.158, p < 0.030). The overall model explained 21.1% of the variance in audit accuracy (R² = 0.211, F = 40.863, p < 0.000). The findings conclude that ICT adoption enhances auditors' capabilities in detecting errors and material misstatements, thereby improving audit precision and reliability. Audit firms should prioritize the strategic adoption of ICT tools within their operational frameworks. Specifically, firms should emphasize improving automated audit procedures to enhance audit findings accuracy, integrate cloud-based audit solutions to enable real-time collaboration and centralized document access, and ensure adequate security protocols and device governance mechanisms to combat cyber security risks associated with mobile audit applications.