（2005）The Effect of Electronic Audit Environments on Performance.pdfVIP

The Effect of Electronic Audit Environments on Performance LYNN BIBLE * LYNFORD GRAHAM* * ANDREW ROSMAN** * This study reports the results of an experiment that examines the impact of electronic work environments on auditor performance. It builds on re- search that has found that electronic work environments are more cog- nitively demanding than traditional paper environments and, thus, negatively impact performance. Forty-eight auditors with an average of 78 months of audit experience from one Big Four accounting firm partic- ipated. Auditors in the electronic work environment were less able to iden- tify seeded errors and to use them properly in evaluating loan covenants than auditors in the traditional paper environment. Given these findings, suggestions are made as to how to maximize auditor performance in an electronic work environment. 1. Introduction Many audit tasks, including workpaper documentation and review, increasingly are performed in electronic environments (e.g.. Croft [1992]; Flagg, Glover, and Smith [1992]; Knaster [1998]; Rothman [1997]; Vezina [1997a, 1997b]). Although many believe that automation eliminates human calculation errors, saves time and money, minimizes paper documentation, and increases accuracy (Rothman [1997]), there is little empirical data to support these claims. Indeed, it has been observed, although the use of IT to strengthen the audit function is widespread, its impact on perfonnance has never been determined (Vezina [1997a; p. 37]). Most disturb- ing is that performance may decline in electronic environments (Galletta, Hartzel, Johnson, Joseph, and Rustagi [1997]). Much of the