The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1834-7649.htm

IJAIM 21,2

attrib
utes
that
impa
ct
adopt
ion
of
audit
softw
are

170

An empirical study in Saudi Ara

Received 3 April 2012

Revised 1 May 2012
1 July 2012
Accepted 6 August 2012

Muhammad A. Razi

Business Information Systems Department, Haworth Colle

Western Michigan University, Kalamazoo, Michigan

Haider H. Madani

Department of Accounting and MIS, College of Industria

King Fahd University of Petroleum & Minerals, D
Saudi Arabia
2
q

Internatio
nal
Journal of
Accountin
g and
Informati
on
Managem
ent
V
o
l
.
2
1
N
o
.
2
,

sta
tis
Purpose Audittic
software and IT-s,
based
auditingco
are widely usedrre
in
developedlat
countries and isio
an
emergingn,
trend in otheran
parts
of
thed
world.
There
purpose of thisgr
paper
is
toes
investigate
thesio
adoption of auditn
software
bywe
Saudi industries.re
This
researchus
extends currented
knowledge
byto
focusing
onex
technology
a
adoptions issuesmi
and comparingne
the results withth
the results of paste
adoptions
ininf
Western
lu
industries.
en
Design/methodol ce
ogy/approach of
de
Demographic
and psychometricm
factors related toog
adoption decisionra
were identifiedph
and incorporatedic
in the researchan
model. A web-d
based
surveyps
instrument wasyc
used to collectho
data.
Them
reliability scoreetr
of each constructic
was
measuredfa
with Cronbachsct
alpha.
Resultsor
from descriptives
on

Abstract

adoption
decision.
Findings
Contrary to
existing
literature,
this
study
shows that
external
pressure has
no impact on
the adoption
decision. In
addition,
similar
to
earlier
findings, the
results
showed that
Company
Readiness
and
Perceived
Benefits are
reasonably
good
predictors of
Adoption
Intention of
audit
software.
Research
limitations/i
mplications
Contrary to
current
evidence,
this research
points to the
result
that
external
pressure has
no impact on
the adoption
decision.
This leads to
an interesting
research
avenue
to
explore the
reasons why

compan i
ies
int
Saudi
Arabia K
do note
see
external
pressure
as
a
signific
ant
factor
behind
decision
to adopt
certain
technol
ogy.
Original

Saudi Arabia
Pe funding this
tro work
Paper type
Research paper le through

u project No.
m SB100018.
&
M
in
The
authorser
would like toals
acknowledge (K
the
supportF
provided by theU
Deanship
ofP
Scientific
M
Research (DSR))
at King Fahdfo
University
ofr

Introduction
Audit software and information
technology (IT) based auditing are
widely used in developed countries
and are an emerging trend in other
parts of the world. IT based auditing
process is essential to deliver
consistent, high-quality audit services
(Stoel et al., 2012; Global Vision,
2006). Omoteso et al. (2010) suggest
that continuous auditing, artificial
intelligence and the control objectives
for information and related technology
(COBIT) are expected to gain more
prominence. However, the decision to
adopt a complex software is always a
multi-dimensional
challenge
for
management. The challenge and
difficulty exacerbates if a company in
a developing country wants to adopt a
complex software from a Western
vendor (Sawah et al., 2008).
There have been many studies on
the adoption and use of emergent
information technologies (IT) in
general. This trend has been
investigated at both individual and
organizational levels at different
settings (Gibbs, 1998; Chwelos et al.,
2001; Riemenschneider et al., 2003;
Brown
and
Venkatesh,
2005;
Bhattacherjee and Harris, 2009; Li et
al., 2011). Individual beliefs about
information systems (IS) play an
important role in the adoption and
deployment of IS. Numerous studies

are
availab
le on
how
beliefs
are
formed
and
what
factors
affect
these
beliefs
(Ajzen
and
Fishbei
n,
1980;
Gatign
on and
Robert
son,
1985;
Bhatta
cherjee
and
Harris,
2009;
Wells
et al.,
2010).
Man
y
differe
nt
models
have

been used to study adoption and use of

emergent IT (Taylor and Todd, 1995).
Most studies are based on corporations
in North America and Europe.
Adoption of info-communication
technology plays a significant role in
achieving competitive advantage in the
global market place. Yunis et al.
(2012) examine the role that
information
and
communication
technologies (ICT) maturity plays in
the
achievement
of
global
competitiveness at the country level.
Research on IT adoption and use in
Middle Eastern corporations, especially
research on adoption of audit software,
is almost non-existent. In response, we
propose to study adoption of audit
software by corporations in Saudi Arabia
because audit software constitutes one
type of emergent technology that is
critical in promoting good corporate
governance, minimizing risk, and
implementing a system of internal
controls within the organization.
Through the researchs outcome, we
contribute an understanding of the audit
software adoption issues in a country in
the Middle East where adoption research
in this area has not been done before. In
addition, exploration of software
adoption in the Middle East is important
for several reasons:
.

Middle Eastern countries face

many difficulties in
implementation and use of
Western technologies (Sawah et
al., 2008).

Management style in the Middle

East is different from that of
Western countries (Abbas and
Paul, 1985).

Government regulations are

different (Faqeeh, 2010).
.

Competitive pressure in many

industrial sectors is less due to
fewer local competitors.

The objective is to compare study

findings to the results of similar
studies done in Western countries. We

believe
that,
the
outcom
e of the
study
will
help
future
audit
softwar
e
adopter
s and
vendor
s in the
Middle
East.

Adoption of audit software

171
I

Auditing and IT in organizations

Auditing is an investigative and
regulatory process by which
auditors detect fraud and unethical
business practice, and check for
completeness,
accuracy,
and
deviations
from
standard
accounting procedures. Auditing,
specifically information technology,
has become an integral part of
corporate governance and provides
reasonable assurance of risk
management
(Merhout
and
Havelka, 2008). An auditors role is
to identify internal and external
sources of risk and their effects on
controls, to evaluate the adequacy
of resources, and to assess the
effects on control procedures
(Janvrin et al., 2008). A substantial
understanding
of
technical
requirements enhances the auditors
role in implementation and proper
use of audit software. An auditor
may assist
IT experts to
select/develop a reliable system,
which can produce highly reliable
information quickly. A reliable
system is one that operates without
material error, fault, or failure
during a specified time in a
specified environment (Tsai et al.,
2005). Zhao et al. (2004) identified
four principles that a reliable
system must achieve:

(1) Availability. The system is

available for operation and
use at times set forth in
service agreements.

(2) Security. The system is

protected
against
unauthorized physical and
logical
access.
Logical
access is the ability to read
or manipulate data through
remote access.

(3) Integrity. System processing

is complete, accurate, timely

and in accordance with the
entitys transaction approval
and
output
distribution

p
ol
ic
y.

(4) M

ai
nt
ai
n
a
bi
lit
y.
T
he
sy
st
e
m
ca
n
be
u
p
da
te
d
in
a
m
an
ne
r
th
at
pr
o
vi
de
s
co
nt
in
u
o
us
av
ai
la
bi
lit
y,
se
cu
rit
y

and integrity.
Auditing is a very time consuming
and resource intensive process.
Organizations normally conduct
periodic auditing; however, due to
resource
constraints,
many
organizations audit only a small
portion of business units that are at
high risk (Sueyoshi et al., 2009).
Availability of audit software and
many
information
and
communications technology (ICT)
tools have made audit process
efficient and less labor intensive. It
is, therefore, possible to have
appropriate automated system and
audit software in place for
continuous
monitoring,
risk
management and assurance of good
corporate governance within the
organization.
Audit software
There is much commercial audit
software
available
in
the
international market. A sample of
audit
software
and
brief
descriptions are provided in Table I.
Prior research
A variety of disciplines have
worked on the adoption process of
information technologies including
research in areas such as
communication (Pijpers et al.,
2001),
consumer
behavior
(Chwelos et al., 2001), medicine
(Ilie et al., 2009), and IS (Iacovou
et al., 1995), among others. Early
organizational IT adoption studies
were based on Rogers (1983)
Diffusion of innovations (DOI)
theory and most works were on the
adoption
of
electronic
data
interchange (EDI) and e-commerce.
The technology acceptance model
(TAM), introduced by Davis (1989)
and validated by many other
researchers in a variety of academic
disciplines, is an extension of the

Audit Software

Description

ACL

www.acl.com

ACL software provid

continuous monitorin
analysis, applied ana
and continuous moni

ActiveData for Excel

IDEA

TopCAATs

Enablon IA

Approva corporation

AlinegRC

AutoAudit

BWise gRC

www.informationactive.com
Ad
ActiveData for excel is a computer aided audit tool (CAAT) that
optio
works inside Microsoft
Excel
www.audimation.com
n of
IDEA is designed toaudit
help accounting and financial professionals
extend their auditing and analytical capabilities, detect fraud and
meet documentationsoftw
standards
www.topcaats.com are
TopCAATs is a finance/audit software that works with MS Excel.
TopCAATs helps organization to manage external audit, internal
audit, financial management, accounts department and Fraud
examiners
http://enablon.com/products/risk-management/internal-audit.aspx
173
Enablon IA offers auditing processes from definition, scheduling,
preparation, execution, documenting of audits and tracking of actions.
The integrated dashboards and consolidation functions provide
companies with an overview of all auditing activities in real time
www.approva.net
Leading provider of continuous controls monitoring software.
Enables business, finance, IT, and audit professionals to identify,
manage, and prevents business exceptions in order to reduce
compliance risk, increases operational efficiency, and prevent
inappropriate payments. Global companies rely on approval to deliver
actionable and auditable intelligence of control breakdowns across
their business systems, processes, and transactions
www.alinergrc.com
Governance, risk, and compliance software leverages the power of
information analytics to give business leaders greater understanding
and confidence in their oversight of strategy and risk. It is unique in
its ability to combine an organizations strategy, risks, controls, and
performance objectives within an intelligent database framework
www.paisley.thomsonreuters.com
AutoAudit takes the paperwork out of workpapers. A fully integrated
audit automation system, it allows audit departments to complete
their work in a single database. With modules for risk assessment,
planning, scheduling, workpapers, reporting, issue tracking, and
administration, it is the most complete way to manage an audit
department
www.bwise.com
BWise is the global leader in governance, risk, and compliance (GRC)
management software, with a strong heritage in business process
management. BWise enables stakeholders to measure and
manage risks and to comply with rules and legislation such as
Sarbanes-Oxley, Solvency II, MAR, IFRS, UCF, MiFID, PCI, GLBA,
and others

Table I.
A
u

dit software

T
a

Audit Software
gRC on demand

Description
w

ideA data analysis software

Methodware eRA

MKinsighte

Protivitis governance Portal

RSA Archer egRC Suite

www.paisley.thomsonreuters.com
A comprehensive internal audit solution proven to increase the
efficiency of the audit process, including risk assessment, planning,
scheduling, documentation, preparation, review, reporting, issue
tracking, and administration. Delivered as a software service there
is no software to install, no hassle with IT, no capital investment, and
no hidden IT costs
www.caseware-idea.com
CaseWare IDEA Inc. is the developer and global distributor of
IDEAe, the leading data analysis software used by accountants,
auditors, and systems and financial professionals around the world.
With IDEA, you can read, display, analyze, manipulate, sample, or
extract from data files from almost any source
www.methodware.com
Methodware is a world-leading developer of risk, compliance, audit,
and investigations software with over 1,800 clients in 80 countries.
Integrate your risk assessments, internal audits, compliance
initiatives, and corporate governance in ERA, our proven GRC
solution. Move to a risk-based audit approach with ERA
www.mkinsight.com
It is the new industry standard audit management software. Webenabled (but not web-dependent) and fully configurable, integrated
modules include: annual planning, scheduling, audit management,
performance reporting, electronic working papers, recommendation
tracking, comprehensive reporting, time recording, risk assessment,
CSA, online questionnaires, and libraries
www.protivity.com
The Governance Portal for Internal Audit is an integrated module of
Protivitis GRC platform that provides a complete audit management
system: scoping, scheduling, electronic workpapers, issue tracking,
and reporting. Offline capabilities allow your auditors to work
anywhere, anytime
www.archer.com
Offers control of the complete audit lifecycle with the RSA Archer
eGRC Suite. Transforms paper-based documentation into a dynamic
audit program that includes planning, scheduling, risk-based
prioritization, staffing, project execution, and remediation. Also
facilitates integration with enterprise GRC processes for a common
approach to risk assessment across assurance and compliance
functions

relative
adoption. EDI adoption
advantage, cost,is also affected by
and
technicalorganizational factors
t
compatibility
like IT training, peer
h
were the majorinfluence,
O
predictors of EDI

factors
that
and business partners (Brown and
influen
Venkatesh, 2005; Chen et al., 2011;
ce IT
Drury and Farhoomand, 1996;
adoptio
Premkumar et al., 1994). Basically,
models on technology adoption can be
ns by
categorized
into
two
streams;
corpora
intention-based streams such as TAM,
tions.
and theory-based streams such as DOI
For
(Riemenschneider et al., 2003).
exampl
Researchers have also identified other

e, factors such as perceived benefits

(PB), organizational readiness, external
pressure, financial cost, competitive
pressure, government pressure, security,
training, IT knowledge, coercive
pressure, internal and normative pressure
have been identified to have significant
impacts on enterprise IT adoption
(Brown and Venkatesh, 2005; Gibbs,
1998; Khalifa, and Davison, 2006;
Kraemer et al., 1992; Lui and Chan,
2008; OCallaghan et al., 1992; Wahid,
2007). Lee et al. (2011), in the context
of technology adoption, investigated the
dynamics of users belief structures over
time and inter-relationships (rates of
change) among dynamics. The authors
used the self-determination theory to
investigate the intrinsic and extrinsic
motivational factors for adopters usage
of open source software (OSS) and nonadopters intention to adopt OSS.

Attempts have been made by some

researchers to approach technology
adoption from a macro-level within a
societal context, environment context
or at country level. A list of related
research can be found in Wahid (2007)
and Bose and Luo (2012). Bose and
Luo (2012) compares behavioral and
technological changes derived from
the adoption of environmentally
responsible greener technologies.
However, most of the research is on
internet or intranet (Fong and
Quaddus, 2010) adoption. Fong and
Quaddus (2010) observe that intranet
user information satisfaction (IUIS) is
positively associated with information
quality of management accounting
system (IQMAS) when intranet is used
to support management accounting in
public hospitals. Therefore, literature
is lacking research within a societal
context or at a country level that
involves technology other than internet
adoption at a personal or corporate
level.
The pace of IT penetration in
accounting audit processes has been
slow, and research on IT adoption in
auditing is few and far between. Este
banez et al. (2010) explored the extent

of IT
knowle
dge and
interest
in
internat
ional
account
ing
standar
ds as
factors
towards
cultural
and
strategi
c
alignm
ent of
the
organiz
ation.
Curtis
and
Payne
(2008)
observe
d that
despite
the
potenti
al
of
comput
erassisted
audit
techniq
ues
(CAAT
s)
to
increas
e
efficien
cy and
effectiv
eness
of audit
engage
ments,
such
techniq

ues were under-utilized in public

accounting. Sisaye and Birnberg (2010)
suggest that management accounting
researchers pay particular attention to an
organizations approach to adoption
strategies. The Enron scandal in the USA
has brought the importance of
accounting audit (internal and external)
to the forefront. Since IT is in the core of
running daily business operations, it is
inevitable that IT applications are used
for internal auditing of accounting
processes. Lack of adoption of IT in
accounting audit directly inhibits the
realization of benefits that IT auditing
software can bring. Ample emphasis has
been given to leveraging IT and
implementing IT security and privacy
(Lamoreaux, 2011). Several auditing
standards setters (AASB, 2001, 2004;
IAASB, 2003a, b; ISACA, 1998)
provide specific guidance on the use of
computer assisted audit techniques
(CAATs). In addition, the IIAs 2009 IT
audit benchmarking study lists various
categories of software used by the
internal audit function to enhance
efficiency and effectiveness of the audit
process (Baker, 2009; Marks, 2009).

There may be several reasons why

companies are resistant to IT audit
software adoption. First, IT audit
software is complex. Implementation
of such software may

I
J
A
I
M
2
1
,
2

176

Ad
optio
n of
audit
softw
are

175

not only involve business process

reengineering, but may also require
major institutional transformation.
Second, internal auditors may not
perceive the benefit of audit software
significant enough to justify the cost
and procedural changes that such an
implementation may require. Third,
top level management may not be
ready to commit to a new system due
to budgetary and other resource
restrictions. Fourth, the company may
not feel the urgency of audit software
due to lack of external pressure
(pressure from government agencies
or pressure from competitors).
Based on the foregoing discussion,
we identify that enterprise adoption of
IT is determined by (adapted from Xu
et al., 2009):

Figure
1.
The
researc
h
model

Individual technological
factors. Perceived usefulness
(PU), PB, perceived ease of use
(PEOU), personal safety, and
trust.

Organizational factors.
Company readiness (CR),
resources, and top management
commitment.

External and/or
environmental factors.
Pressure from competitors,
social norms, peer pressure,
government pressure, and legal
pressure.

These factors are also expected to be

the major influential factors behind
audit software adoption in Saudi
Arabia.
Model development and relationships
formulation
Based on the literature review, the
following research model has been
developed (Figure 1). In this model,
enterprises adoption or consideration
towards adoption of internal audit
software is determined by four factors:
PB, perceived adoption risk, CR, and
external pressure. We also think that
factors such as PB and adoption
risk are influenced by demographic
factors and past adoption experience of
a software. Demographic variables such

as age
have
been
used
in
much
techn
ology
accept
ance
resear
ch in
many
fields

Perceived
Benefits
Age

Adoption
Risk

R1 (+)
R2 (+)

Company
Readiness

Past
Adoption
Experience

External
Pressure

Note:R1,....,R4represent
correlations

(Gaylin et al., 2011; Kim and

Forsythe, 2010a, b; Zhang, 2009; AlGahtani, 2008). Al-Gahtani (2008)
attempted
to
investigate
the
applicability of the TAM model in the
Arab context and attempted to extend
TAM with three demographic factors,
such as, gender, age and educational
level. The author concluded that age
moderated
the
influences
of
computers usefulness and ease of use
on attitudes and intention to use.
Similarly, the influence of expertise
in technology use and/or adoption has
been explored in many studies (Rau
and Haerem, 2010; Goeke, 2006). In
the case of technology use, Goeke
found expertise to be much more
salient than experience as a predictor
of user perceptions of data warehouse
ease-of-use, usefulness, and flexibility.
Therefore, influence of age, expertise,
and past adoption experience on PB
and adoption risk are explored
(Figure 1).
Perceived benefits
Davis (1989) in his TAM suggested that
PU and PEOU were two factors that
could be used to explain why people
adopted or did not adopt IT. Many
researchers have since found TAM to be
useful in providing a comprehensive and
prudent explanation of IT adoption

behavio
r (Xu
et al.,
2009;
Legris
et al.,
2003;
Venkat
esh et
al.,
2003;
Mao
and
Palvia,
2006).
Hernan
dez et
al.
(2008)
also
found
that
PEOU
helps
predict
ed the
intentio
n
of
using a
technol
ogy.
Therefo
re, we
formula
te the

R3 (+)

R4 (+)

In
ad
S

first relationship as follows:

R1. PB positively influence audit

software adoption.
Adoption risk
Risk, according to classical theory, is
defined as the variance of the
probability distribution of possible gains
and losses associated with a particular
alternative (March and Shapira, 1987).
Chiles and McMackin (1996) view risk
as the possibility of loss. More often
than not, corporate managers have to
deal with both risk and uncertainty in
decisions they make. In many cases,
risks
can
be
understood
with
probabilities. For example, the risks
associated with betting on heads when
tossing a fair coin or picking a number
when rolling a dice. In these two events,
the uncertainty in each alternative state
can be quantified with probability.
However, in many other cases such as
software adoption and implementation, a
decision-maker confronts unknown
uncertainty and thereby, understands risk
as a subjective construct.

It is no surprise to see that risk

related
to
adoption
and
implementation of software is a major
concern behind hesitation in adoption
of new software (Lui and Chan, 2008;
Curtis and Payne, 2008; Chakraborty
and Sharma, 2007; Tsai et al., 2005).
Liu et al. (2008) found a negative
relationship
between
risk
and
organizational capabilities. Just like
any non-trivial software, adoption risk
of audit software exists because of
lack of appropriate knowledge in the
software and fear that the software will
not work appropriately. In other
words, perceived risk of audit software
would have a negative impact on
adoption decision of such software.
Therefore, the second relationship is
formulated as follows:
R2. Adoption risk negatively
influences audit software adoption.
Company readiness
CR indicates whether an organization

has
sufficie
nt
financi
al
resourc
es,
technic
al
expertis
e, and
manage
ment
commit
ment to
underta
ke the
adoptio
n of a
new
technol
ogy

Adoption of audit software

177
I

(Xu et al., 2009; Liu et al., 2008;

Iacovou et al., 1995; Chwelos et
al., 2001). Positive attitude toward
technology is also an indicator of
CR. Negative attitude leads to
resistance, and lack of management
commitment leads to reduction of
resources (Basu et al., 2002). Liu
et al. (2008) show that CR has a
positive influence on software
adoption. Therefore, we propose
that:
R3. CR positively influences
audit software adoption.
External pressure
External pressures to adopt IT come
from competitors, trading partners,
consultants and other external
stakeholders (Chwelos et al., 2001;
Iacovou et al., 1995). DiMaggio and
Powell (1983) identified three types
of pressures: coercive, normative, and
mimetic. Coercive pressures are
exerted by customers. Normative
pressures are general business
environment pressures and are often
indirectly mediated by employees
(Khalifa and Davison, 2006).
Mimetic pressures are exerted by
competitor organizations. Khalifa,
and Davison (2006) found that
pressure from customers is a strong
driver of the intention to adopt
electronic trading system (ETS).
Pressure exerted by competitors is
also a significant driver of the
intention to adopt ETS. However, in
the case of adoption of audit
software, the main pressure comes
from the government and federal
regulators, particularly in the USA.
Adoption of audit software is
expected to be influenced by the
pressure from competitors, partners,
government regulators and other
stakeholders in the industry. We
identify pressures from outside
entities as external pressure. Liu et

a
l

R
4.

E
xt
er
na
l
pr
es
su
re
p
os
iti
ve
ly
in
fl
ue
nc
es
au
di
t
so
ft
w
ar
e
ad
o
pt
io
n.

Participants
Industries take different approaches
in making a technology adoption
decision: one approach is to rely on
the opinions of the chief information
officer (CIO), chief operations officer
(COO) or, in the case of a small
organization, the opinions of the chief
executive officer (CEO). In general,
CIO/COO of a large organization and
CEOs of small organizations are the
primary decision makers in largescale purchases of IT hardware and
software. Another approach is
decision by consensus, where an
influential member of a department
initiates the decision making process
and seeks the opinions of experts,
users, and other stakeholders from
relevant departments, including IT. In
this research, we selected two
primary groups of users and
implementers,
namely
accounting/audit professionals and IT
experts who either are the primary
users and/or who play important role
in making adoption decisions. In
order to make sure that the
respondent has authority over IT
adoption decision, we ask them to
rate their influence on IT adoption
decision based on a scale of 0-10, 0
being the least and 10 being the most.

R
e
T
h
A web-based survey was created
and two attempts were made to collect
data. A total of 55 usable survey
results were collected from industries
in the eastern part of Saudi Arabia.
Survey instrument development
The dependent variable, in this research,
is intention to use audit software.

Intentio
n as a
depend
ent
variabl
e has
been
used
widely
in

previous research (Taylor and Todd,

1995; Brown and Venkatesh, 2005; Chen
et al., 2011). The specific measures are
provided in the survey instrument
(Appendix 1). Constructs were measured
using Likert scale consistent with
application of this scale in many studies
(Riemenschneider
et
al.,
2003;
Venkatesh et al., 2003; Brown and
Venkatesh, 2005; Zhang, 2009). The
demographic characteristics that are
more pertinent to adoption decisions are
measured. Several authors mentioned
that demographic characteristics of
senior executives are useful predictors of
their acceptance of IT (Zhang, 2009;
Pijpers et al., 2001). Pijpers et al.
(2001) found that education level
positively influences PU while age
negatively influences PU. However, in
the case of age, Zhang (2009) observed
mixed results; age is found to positively
influence PU but not PEOU. In our
study, PU is used as PB.

Instrument validation
Instrument was validated by a group of
industry experts and university faculty.
Some changes in the survey
instrument were adopted based on
expert recommendations. For research
that involves psychometric test scores,
it is important to measure the internal
consistency of items in each construct.
Therefore, the internal consistency of
items in each construct was measured
with Cronbachs a. The reliability
score of all but one construct exceeded
the threshold of 0.70 (Table II). We
keep the construct adoption risk in
the model since the reliability score of
0.692 is very close to 0.70.
Results and discussions
First, we analyzed mean values of
model variables (Table III). Mean
values of PB and adoption intention
(ADP) are 1.7 and 1.6, respectively,
indicating that respondents see

Ad
optio
n of
audit
softw
are

179

Constructs
Perceived benefits (PB)
Adoption risk (RSK)

Cronbachs a
0.823
0.692

Company readiness (CR)

External pressure (EXP)
Adoption intention (ADP)

Factors
Perceived benefits (PB)
Company readiness (CR)
External pressure (EXP)
Adoption intention (ADP)
Adoption risk (RSK)

0.81
0.751
0.92

Mean
1.7
2.18
3.24
1.6
3.34

IJAIM
21,2

180

positive benefits associated with audit software. Intention to adopt audit software is
favorable as well. The mean value of CR is 2.18, which indicates a somewhat muted
readiness by company towards audit software adoption. The reason behind the muted
readiness could be attributed to lack of technology resources and inadequate
management support. However, this needs further investigation. The mean value of
external pressure (EXP) and adoption risk (RSK) are 3.24 and 3.34, respectively.
Therefore, at this point, these two variables are not considered significant forces behind
the decision to adopt or not adopt audit software.
Influence of age, expert background, and past experience on PB and on adoption risk
(Table IV)
As Table IV indicates, opinions on PB and adoption risk are similar across all age
groups, expertise, and past adoption experience. All groups see positive benefit in
adopting audit software and do not support the notion that the adoption of audit
software is risky. However, ANOVA was used to test the significance of difference in
opinions based on participants age, expert background, and past experience. All
results indicate that the differences are not significant at p , 0.01. In other words,
opinions were not significantly different among three different age groups even though
PB seem to wane with age (Table IV: 1.5 for age # 30 to 2.2 for age . 50). Opinions of
participants with accounting/audit background were not significantly different from
the opinions of participants with IT background, and finally, past adoption experience
had no influence on PB and adoption risk. We also compared opinions of older
participants (age more than 50 years) with other two age groups combined (age 50 years
or younger). ANOVA results still failed to show significant difference at p , 0.05. The
difference, however, is significant at p , 0.1.
Correlation
Table V presents correlation between variables. It should be noted that relationships
between PB and ADP, and between CR and ADP and are positive and significant at
a 0.01 level, indicating that the higher the PB and CR, the higher the chances of
adoption of audit software. PB and CR are also highly correlated (significant at a 0.01
level). The relationship between external pressure (EXP) and adoption risk (RSK) is
positive and significant at a 0.05 level. As expected, the relationship between RSK
and PB is negative and significant at a 0.05 level indicating that the risk negatively
influences the benefit. Similarly, the relationship between RSK and ADP is negative and
significant at a 0.05 level, indicating that risk has a negative impact on adoption
decision. Moreover, there is no significant relationship between EXP and ADP.

Expertise
Age
Table IV.
Mean values of expertise,
age, and past adoption

Past adoption

Accounting/audit
IT
#30
31-50
.50
No
Yes

Perceived benefits (TPB)

Adoption risk (TRSK)

1.73
1.6
1.5
1.62
2.2
1.65
1.73

3.47
3.57
3.61
3.61
3
3.65
3.41

PB

CR

EXP

0.790
1

2 0.142
2 0.220
1

ADP

RSK

Adoption of
audit software

2 0.295 *
2 0.245
0.272 *
2 0.330 *
1

181

*
**
Notes: Correlation is significant at: 0.05 and
0.1 levels (two-tailed); variables: PB perceived
benefit, CR company readiness, EXP external pressure, ADP adoption intention, and RSK
adoption risk

Correlation

PB
CR
EXP
ADP
PSK

Regression
A stepwise regression procedure was used to
predict ADP using other variables as
independent predictors. Entry criteria for a
variable entering the model was set to F-toenter #0.05 and a variable leaving the model
was set to F-to-enter $0.10. Results of
stepwise regression are presented in Appendix
2. The final model (Model 2) excluded
variables EXP and RSK since EXP and RSK
are not significant contributors toward
2
2
prediction of ADP. The R and adjusted R
for the final model were 0.76 and 0.75,
respectively. Therefore, regression results
suggest that CR and PB are reasonably good
predictors of ADP of audit software.
Conclusions
The objective of this research was to identify
the influence of individual factors such as PU,
PB, and PEOU; organizational factors such as
CR; and external and/or environmental factors
such as pressure from competitors, social
norms, peer pressure, government pressure,
legal pressure, etc. on adoption decisions of
audit software in Saudi Arabian industries. The
results of this study identify similarities and
differences in findings when compared with
the findings of earlier studies done in

0.860 * *
0.767 * *
20.099
1

Table V.

develope discussed before, have identified relative

d
advantage, cost, technical compatibility, IT
countries training, peer influence, and business partners as
.
Weinfluential factors in predicting technology
have
adoption. Factors such as PB, organizational
used
readiness, external pressure, financial cost,
several competitive pressure, government pressure,
factors security, training, IT knowledge, coercive
from
pressure, internal and normative pressure have
these
also been identified to have significant impacts on
three
categorie enterprise IT adoption. In light of the previous
s in ourresearch findings, we provide the major findings
model. of this research below.
All respondents saw benefit in audit
Any
pressure software. Moreover, age difference, background
exerted in IT or Accounting/Audit, and previous
adoption experience had no influence on how
from
outside respondents evaluated PB and adoption risk.
of
the Contrary to existing literature (Khalifa, and
organizat Davison, 2006; Liu et al., 2008), our study
ion wasshows that external pressure has no impact on
consider the adoption decision. This difference in results
could be attributed to the organizational cultural
ed
external difference, lack of competitive pressure,
pressure. government regulation, or other factors in Saudi
Previo Arabia. Therefore, further study is warranted.
The relationship between risk and perceived
us
research, benefit is negative. The relationship between
risk and ADP is negative as well. Therefore, the
as
higher the risk, the lower the

IJAIM
21,2
182

perceived benefit, and the lower the motivation towards adoption. These findings
support earlier findings.
Regression analysis suggests that CR and PB are reasonably good predictors of
ADP of audit software. This result supports earlier findings as well.
Implications for practice
Research findings of this study have several practical implications. First, employees
must be informed and convinced of the benefits of audit software and companies must
also be ready with adequate resources before pushing adoption of the software.
Second, age, expertise, and previous software implementation experience have no
influence on adoption decision. Therefore, age is not a barrier for software adoption
and previous successful or unsuccessful experience does not necessarily have a
positive or negative view of software adoption. Third, decision makers in Saudi
companies, at this point in time, do not see external pressure as a significant factor
behind adoption of audit software. This may, however, indicate a lack of appropriate
regulations from the government and/or lack of use of audit software by the
competitors in Saudi Arabia.
More broadly, companies that are resourceful and see benefits in implementing
audit software are more likely to consider adopting the software. This underscores the
importance of aligning decision makers expectations of the software with the
companywide audit objectives.
Future research
As pointed out in the previous section, external pressure had no impact on the adoption
decision. Therefore, the results from this research hold important implications for future
research that seek to further explore the reasons behind differences in results of studies
conducted in developed countries versus the results of this research. More specifically, the
difference in results could be attributed to many factors such as cultural difference,
management style, lack of competitive pressure, lack of appropriate government
regulations, or other location specific factors. In short, the possibilities of research on
software adoption involving multiple countries in the Middle East that consider cultural,
managerial, and government factors are plentiful and would provide practical guidance for
IT adoption practitioners in that part of the world.
References
AASB (2001), Auditing Guidance Statement AGS 1060 Computer Assisted Audit
Techniques, Australian Auditing Standards Board, Australian Accounting Research
Foundation, Melbourne.

AASB (2004), Auditing and Assurance Standard AUS 406 The Auditors Procedures
in Response to Assessed Risks, Australian Auditing Standards Board, Australian
Accounting Research Foundation, Melbourne.
Abbas, A. and Paul, S. (1985), Managerial decision styles and work satisf
Saudi Arabia, Management Decision, Vol. 23 No. 2, pp. 33-43.
Ajzen, I. and Fishbein, M. (1980), Understanding Attitudes and Predicting Social
Behavior, Prentice-Hall, Upper Saddle River, NJ.
exploring an
extended
Al-Gahtani, S.S. (2008), Testing for the applicability of the TAM model in the Arabic context:

TAM with three moderating factors, Information Resources Management Journal,

Vol. 21 No. 4, pp. 1-26.
Baker, N. (2009), Software trend spotting, Internal Auditor, Vol. 66 No. 4, pp. 30-34.
Basu, V., Hartono, E., Lederer, A.L. and Sethi, V. (2002), The impact of organizational
commitment, senior management involvement, and team involvement on strategic
information systems planning, Information & Management, Vol. 6, pp. 513-524.
Bhattacherjee, A. and Harris, M. (2009), Individual adaptation of information technology,
The Journal of Computer Information Systems, Vol. 50 No. 1, pp. 37-45.
Bose, R. and Luo, X. (2012), Green IT adoption: a process management approach, International
Journal of Accounting and Information Management, Vol. 20 No. 1, pp. 63-77.

Brown, S.A. and Venkatesh, V. (2005), Model of adoption of technology in households: a

baseline model test and extension incorporating household life cycle, MIS Quarterly,
Vol. 29 No. 3, pp. 399-426.
Chakraborty, S. and Sharma, S.K. (2007), Enterprise resource planning: an integrated strategic
framework, International Journal of Management and Enterprise Development,
Vol. 4 No. 5, pp. 533-551.
Chen, K.C., Razi, M. and Rienzo, T. (2011), Intrinsic factors for continued ERP learning a
precursor to inter-disciplinary ERP curriculum design, Decision Sciences Journal of
Innovative Education, Vol. 9 No. 2, pp. 149-176.
Chiles, T.H. and McMackin, J.F. (1996), Integrating variable risk preferences, trust, and transaction
cost economics, Academy of Management Review, Vol. 21 No. 1, pp. 73-99.

Chwelos, P., Benbasat, I. and Dexter, A. (2001), Research report: empirical test of an EDI
adoption model, Information Systems Research, Vol. 3, pp. 304-321.
Curtis, M.B. and Payne, E.A. (2008), An examination of contextual factors and individual
characteristics affecting technology implementation decisions in auditing, International
Journal of Accounting Information Systems, Vol. 9 No. 2, pp. 104-121.
Davis, F.D. (1989), Perceived usefulness, perceived ease of use and user acceptance of
information technology, MIS Quarterly, Vol. 3, pp. 319-340.
DiMaggio, P. and Powell, W.W. (1983), The iron cage revisited: institutional isomorphism and
the collective rationality in organizational fields, American Sociological Review, Vol.
48 No. 2, pp. 147-160.
Drury, D.H. and Farhoomand, A. (1996), Innovation adoption of EDI, Information
Resources Management Journal, Vol. 3, pp. 5-13.
Estebanez, R.P., Grande, E.U. and Colomina, C.M. (2010), Information technology
implementation: evidence in Spanish SMEs, International Journal of Accounting and
Information Management, Vol. 18 No. 1, pp. 39-57.
Faqeeh, O. (2010), The role of the general auditing bureau of Saudi Arabia, International
Journal of Government Auditing, Vol. 37 No. 1, pp. 20-23.
Fong, S.C.C. and Quaddus, M. (2010), Intranet use in Hong Kong public hospitals,
International Journal of Accounting and Information Management, Vol. 18 No. 2,
pp. 156-181.
Gatignon, H. and Robertson, T.S. (1985), A propositional inventory for new diffusion research,

Journal of Consumer Research, Vol. 11 No. 4, pp. 859-867.

Gaylin, D.S., Moiduddin, A., Mohamoud, S., Lundeen, K. and Kelly, J.A. (2011), Public
attitudes about health information technology, and its relationship to health care quality,
costs, and privacy, Health Services Research, Vol. 46 No. 3, pp. 920-938.

21,2
IJAIM

Adoption of
audit software

183

Gibbs, J. (1998), Going live with SAP, Internal Auditor, Vol. 55 No. 3, pp. 70-75.

184

Global Vision (2006), Global Capital Markets and the Global Economy: A Vision from the
CEOs
of
the
International
Audit
Networks,
available
at:
http://globalpublicpolicysymposium.com/ CEO_Vision.pdf (accessed October 2010).
Goeke, R.J. (2006), An examination of the effects of experience, expertise, and perceived
flexibility on data warehouse use, KSU dissertations (Graduate School of Management),
Kent State University, Kent, OH.
Hernandez, B., Jimenez, J. and Martin, M.J. (2008), Business acceptance of information
technology: expanding TAM using industry sector and technological compatibility,
International Journal of Enterprise Information Systems, Vol. 4 No. 4, pp. 62-79.
IAASB (2003a), International auditing practice statement 1006 audits of the financial
statements of banks, Handbook of International Auditing, Assurance, and Ethics
Pronouncements, International Auditing and Assurance Standards Board, International
Federation of Accountants, New York, NY, pp. 663-751.
IAASB (2003b), International auditing practice statement 1009 computer assisted audit
techniques, Handbook of International Auditing, Assurance, and Ethics
Pronouncements, International Auditing and Assurance Standards Board, International
Federation of Accountants, New York, NY, pp. 761-770.
Iacovou, C.L., Benbasat,
I. and Dexter, A. (1995), Electronic data interchange and
small organizations: adoption and impact of technology, MIS Quarterly, Vol. 4,
pp. 465-485.
Ilie, V., Slyke, C.V., Parikh, M.A. and Courtney, J.F. (2009), Paper versus electronic medical
records: the effects of access on physicians decision to use complex information
technologies, Decision Sciences, Vol. 40 No. 2, pp. 213-241.
ISACA (1998), Use of Computer Assisted Audit Techniques (CAATs), Information
Systems Audit and Control Association, Rolling Meadows, IL.
Janvrin, D., Bierstaker, J. and Lowe, D.J. (2008), An examination of audit information technology
use and perceived importance, Accounting Horizons, Vol. 22 No. 1, pp. 1-21.

Khalifa, M. and Davison, R.M. (2006), SME adoption of IT: the case of electronic trading
systems, IEEE Transactions on Engineering Management, Vol. 2, pp. 275-284.
Kim, J. and Forsythe, S. (2010a), Adoption of dynamic product imagery for online shopping:
does age matter?, The International Review of Retail, Distribution and Consumer
Research, Vol. 20 No. 4, pp. 449-467.
Kim, J. and Forsythe, S. (2010b), Factors affecting adoption of product virtualization
technology for online consumer electronics shopping, International Journal of Retail
& Distribution Management, Vol. 38 No. 3, pp. 190-204.
Kraemer, K.L., Gurbaxani, V. and King, J.L. (1992), Economic development, government
policy, and the diffusion of computing in Asia-Pacific countries, Public Administration
Review, Vol. 52 No. 2, pp. 146-156.
Lamoreaux, M. (2011), Beef up internal audit, Journal of Accountancy, Vol. 211 No. 6, p. 20.

Lee, K., Yan, A. and Joshi, K. (2011), Understanding the dynamics of users belief in software
application adoption: SSIS, International Journal of Information Management, Vol.
31 No. 2, pp. 160-170.
Legris, P., Inghamb, J. and Collerettec, P. (2003), Why do people use information technology?
A critical review of the technology acceptance model, Information & Management,
Vol. 40 No. 3, pp. 191-204.
of
adopters
and
a
Li, Y., Tan, C.-H., Xu, H. and Teo, H.-H. (2011), Open source software adoption: motivations
motivations of

non-adopters, The DATA BASE for Advances in Information Systems, Vol. 42 No.
2, pp. 76-94.
Liu, C., Sia, C.-L. and Wei, K.-K. (2008), Adopting organizational virtualization in B2B firms:
an empirical study in Singapore, Information & Management, Vol. 45, pp. 429-437.
Lui, K.M. and Chan, K.C.C. (2008), Rescuing troubled software projects by team
transformation: a case study with an ERP project, IEEE Transactions on Engineering
Management, Vol. 55 No. 1, pp. 171-184.
Mao, E. and Palvia, P. (2006), Testing an extended model of IT acceptance in the Chinese
cultural context, Database for Advances in Information Systems, Vol. 37 Nos 2/3,
pp. 20-32.
March, J.G. and Shapira, Z. (1987), Managerial perspectives on risk and risk taking,
Management Science, Vol. 33, pp. 1404-1418.
Marks, N. (2009), Leveraging data analysis software, Internal Auditor, Vol. 66 No. 4, pp. 35-38.

Merhout, J. and Havelka, D. (2008), Information technology auditing: a value-added IT

governance partnership between IT management and audit, Communications of the
AIS, Vol. 23 No. 26, pp. 463-482.
OCallaghan, R., Kaufmann, P.J. and Konsynski, B.R. (1992), Adoption correlates and share
effects of electronic data interchange systems in marketing channels, Journal of
Marketing, Vol. 2, pp. 45-56.
Omoteso, K., Patel, A. and Scott, P. (2010), Information and communications technology and
auditing: current implications and future directions, International Journal of Auditing,
Vol. 14, pp. 147-162.
Pijpers, G.G.M., Bemelmans, T.M.A., Heemstra, F.J. and Van Montfort, K.A.G.M. (2001),
Senior executives use of information technology, Information and Software
Technology, Vol. 43 No. 15, pp. 959-971.
Premkumar, G., Ramamurthy, K. and Nilakanta, S. (1994), Implementation of electronic data
interchange: an innovation diffusion perspective, Journal of Management
Information Systems, Vol. 2, pp. 157-186.
Rau, D. and Haerem,
T. (2010), Applying an organizational learning perspective to
new technology
deployment by technological gatekeepers: a theoretical model
and key issues for future research, Information Systems Frontiers, Vol. 12 No. 3, pp.
287-297.
Riemenschneider, C.K., Harrison, D.A. and Mykytyn, P.P. (2003), Understanding IT adoption
decisions in small business: integrating current theories, Information and
Management, Vol. 40, pp. 269-285.
Rogers, E. (1983), Diffusion of Innovation, 3rd ed., The Free Press, New York, NY.
Sawah, S.E., Tharwat, A.A.F. and Rasmy, M.H. (2008), A quantitative model to predict the
Egyptian ERP implementation success index, Business Process Management
Journal, Vol. 14 No. 3, pp. 288-306.
Sisaye, S. and Birnberg, J. (2010), Extent and scope of diffusion and adoption of process
innovations in management accounting systems, International Journal of Accounting
and Information Management, Vol. 18 No. 2, pp. 118-139.
Stoel, D., Havelka, D. and Merhout, J.W. (2012), An analysis of attributes that impact
information technology audit quality: a study of IT and financial audit practitioners,
International Journal of Accounting Information Systems, Vol. 13 No. 1, pp. 60-79.

IJAIM
21,2

Adoption of
audit software

185

186

Sueyoshi, T., Shang, J. and Chiang, W.-C. (2009), A decision support framework for internal
audit prioritization in a rental car company: a combined use between DEA and AHP,
European Journal of Operational Research, Vol. 199 No. 1, pp. 219-231.
Taylor, S. and Todd, P. (1995), Understanding information technology usage: a test of
competing model, Information Systems Research, Vol. 6 No. 2, pp. 144-176.
Teo, H.H., Wei, K.K. and Benbasat, I. (2003), Predicting intention to adopt interorganizational
linkages: an institutional perspective, MIS Quarterly, Vol. 1, pp. 19-49.
Tsai, W.-H., Chien, S.-W., Hsu, P.-Y. and Leu, J.-D. (2005), Identification of critical failure
factors in the implementation of enterprise resource planning (ERP) system in Taiwans
industries, International Journal of Management and Enterprise Development,
Vol. 2 No. 2, pp. 219-239.
Venkatesh, V., Morris, M.G., Davis, G.B. and Davis, F.D. (2003), User acceptance of
information technology: toward a unified view, MIS Quarterly, Vol. 3, pp. 425-478.
Wahid, F. (2007), Using the technology adoption model to analyze internet adoption and use
among men and women in Indonesia, Electronic Journal on Information Systems in
Developing Countries, Vol. 32 No. 6, pp. 1-8.
Wells, J.D., Campbell, D.E., Valacich, J.S. and Featherman, M. (2010), The effect of perceived
novelty on the adoption of information technology innovations: a risk/reward
perspective, Decision Sciences, Vol. 41 No. 4, pp. 813-843.
Xu, B., Shao, B., Lin, Z. and Shi, Y. (2009), Enterprise adoption of internet banking in China,
Journal of Global Information Technology Management, Vol. 12 No. 3, pp. 7-28.
Yunis, M.M., Koong, K.S., Liu, L.C., Kwan, R. and Tsang, P. (2012), ICT maturity as a driver
to global competitiveness: a national level analysis, International Journal of
Accounting and Information Management, Vol. 20 No. 3, pp. 255-281.
Zhang, J. (2009), Exploring drivers in the adoption of mobile commerce in China, The
Journal of American Academy of Business, Vol. 15 No. 1, pp. 64-69.
Zhao, N., Yen, D.C. and Chang, I.-C. (2004), Auditing in the e-commerce era, Information
Management & Computer Security, Vol. 12 No. 5, pp. 389-400.

Appendix 1. Questionnaire
Characteristics of respondents
Age:
.

Less than or equal to 30.

31-50.

Over 50.

Past adoption experience:

Expertise:

YES/NO

Accounting/auditing.

Information technology.

Others.

Job title:
Please rate your influence on IT adoption decision based on a scale of 0-10, 0 being the least
and ten being the most.
Enterprise
characteristics

Check (Yes/No) or provide information if applicable or leave blank:

Company uses ERP:

YES/NO

Company uses accounting software:

YES/NO

Company has documented internal audit procedure:

Company uses ERP for Audit:

YES/NO

187

YES/NO

Company uses separate Audit Software:

YES/NO

If yes, name of the audit software:

Number of employees:
#

100

101-500
$ 500

Constructs
Perceived benefits. Indicate your agreement or disagreement to the following questions. 1
strongly agree, 2 agree, 3 undecided, 4 disagree, 5 strongly disagree:

Using audit software would enhance audit effectiveness.

Using audit software would enhance audit efficiency.
Company readiness. Indicate your agreement or disagreement to the following
questions: Company has the financial resources to adopt audit software.
Company has the technological resources to adopt audit software.
Attitude towards new technology is positive.
Top management is committed to adopt audit software.
External pressure. Indicate your agreement or disagreement to the following
questions: Decision to adopt audit software is influenced by government regulation.
Decision to adopt audit software is influenced by consulting firms.
Audit software adoption. Indicate your agreement or disagreement to the following
questions: I intend to adopt audit Software.
I intend to learn more about audit Software. I
intend to consider adopting audit Software.
Adoption risk. Indicate your likelihood that the following may happen.
1 very likely, 2 likely, 3 undecided, 4 not likely, 5 not likely at all:
Audit software may not properly work.
Employees may not approve the technology.
Training may be difficult to arrange.

21,2
IJAIM

Adoption of
audit software

Appendix 2

188

About the authors

Muhammad A. Razi is an Associate Professor at the Haworth College of Business, Western Michigan
University. He received MBA and PhD degrees from Virginia Commonwealth University, Richmond,
Virginia. He has worked as an IT professional in the US manufacturing and service sectors and his
work has appeared in Decision Sciences Journal of Innovative Education, Expert Systems
with Applications, Journal of Information Technology Theory and Application (JITTA),
Information Management & Computer Security, among other journals. His research and teaching
interests are in the areas of ERP/SCM/CRM, database systems, systems analysis and design,
electronic commerce and IT adoption for SMEs. Muhammad A. Razi is the corresponding author and
can be contacted at: muhammad.razi@wmich.edu

Haider H. Madani is an Associate Professor of Accounting at the Department of Accounting

and MIS, College of Industrial Management (CIM), King Fahd University of Petroleum and
Minerals (KFUPM) in Saudi Arabia. He earned his PhD in Accounting from Henley Business
School, UK. He has taught accounting courses in CIM undergraduate, MBA, and EMBA
programs and has served as a consultant for major Saudi and international organizations. His
research interests are financial reporting and corporate governance.
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or
visit our web site for further details: www.emeraldinsight.com/reprints