Adoption of audit software by Small and Medium-sized Practices in East Africa

Abstract

Purpose: Information technology has been implemented by organizations in East Africa with most transactions and records being digital. At end of the financial year, these organizations require their financial statements to be audited. This study was to first take stock of the level of adoption of audit software by Small and Medium-sized Practices (SMPs) in East Africa. This comes at a time where the Covid-19 pandemic has led to even further computerization as organizations implemented health directives on face-to-face contact, paperless environment and work-from-home initiatives, among others.  Methodology: A questionnaire comprising seven questions were sent out to sampled firms to respond electronically via the SurveyMonkey® tool. Out of about 1310 firms, the questionnaire was sent out to a random sample of 700. Results:  A total of 251 responses were received (36% of the sample). 70% of the SMPs were 1-10 years old in practice. Only one-in-four firms (25%) had adopted audit software. The four most common audit software were CaseWare®, Myaudit, PCAS and DraftWorxTM. The three major benefits from using audit software were the improvement in audit quality, audit project efficiencies and IFRS-compliant accounts. The three main challenges faced in adoption of audit software were the high costs of the software licenses, the lack of timely vendor support and the unstable/high cost of internet connectivity. The three main suggestions to increase adoption of audit software by SMPs in East Africa were to compel all the firms to adopt, to lower the cost of the software and probably develop a home-grown solution. Significance of study: The study has helped highlight the extent of adoption of audit software. It has also revealed the most common audit software in use. With this information, the NBAAT, ICPAK, ICPAU, iCPAR and OPC can develop a 3-year roadmap to facilitate the SMPs to gradually acquire the audit software. At each Annual Practitioner’s Forum, adoption of audit software and how it enables the firm’s business to grow can become a permanent topic. This can supplement the advanced Microsoft Excel® training that is being undertaken by most of the SMPs. Future research: After a 2-year period, further research can include an in-depth interview with a sample of firms that responded to determine the influence of audit software or lack thereof on their competitiveness among fellow SMPs in their respective countries. 

Keywords: Audit Quality, Effectiveness, Efficiency, audit software

Article Review Status: Published

Pages: 25-40 (Download PDF)

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