Robotic Process Automation in the External Audit Function: Defining and Validating an Evaluation Framework

Details

• Author: S.J. (Sander) van den Broek
• Title: Robotic Process Automation in the External Audit Function: Defining and Validating an Evaluation Framework
• 1st Supervisor: prof. dr. J.R.O. Osterrieder
• 2nd Supervisor: dr. J.M.J. Heuven
• Degree: MSc - Business Administration
• Specialisation: Financial Management
• University: University of Twente
• Year: 2024

Abstract

The external audit function is facing many contemporary challenges, such as a shortage of skilled auditors, constantly changing laws and regulations, continuing scandals within the sector, high turnover rates, and where the focus of this thesis lies, innovations in information technology. One technology that can potentially change the way audits are conducted is Robotic Process Automation (RPA). Many papers have been written about the use of RPA in financial statement audits, but none have focused on the technology’s success criteria in the sector. The aim of this thesis, therefore, is to determine how a successful RPA implementation in the context of external auditing can be conceptualised. During the research, interviews were conducted with assistant accountants, managers, partners, IT auditors, RPA consultants, and other staff. The entire research was conducted at one of the six largest audit firms in the Netherlands that hold a PIE license. The interview transcripts were analysed by following the Gioia method, which led to a process model explaining how RPA success can be defined within the audit sector. When an RPA solution meets certain information, system, service, and audit qualities, auditors will feel more inclined to make use of, and subsequently use, RPA tools, which in turn leads to all relevant stakeholders realising net benefits from the implementation. RPA on its own will, however, not transform the audit; the use of other technologies in combination with RPA is required. The audit of the future will be an integration of the traditional financial statement audit and the IT audit, where auditors will spend more time analysing and understanding clients’ IT infrastructures, as opposed to reviewing and matching documents. To get to this point, there are still multiple hurdles, such as clients’ IT systems, the mentality of auditors, the work culture at audit firms, and the overall vision that is taken by audit firms regarding embracing IT innovations. Future research can direct its attention to these areas.

Important links

• University of Twente Student Theses Repository: Master Thesis S.J. van den Broek

Data

• 12 interviews conducted with auditors and IT-specialists at a large audit firm in the Netherlands
• Interview transcripts analysed by following the Gioia Methodology (Gioia et al., 2013)

Contact

• LinkedIn: Sander van den Broek