The factors affecting CAATs adoption evidence in ho chi minh city

STATE BANK OF VIET NAM MINISTRY OF EDUCATION AND TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY  TRANG DIEU AI THE FACTORS AFFECTING CAATs ADOPTION – EVIDENCE IN HO CHI MINH CITY GRADUATION THESIS MAJOR: ACCOUNTING AND AUDITING CODE: 7340301 HO CHI MINH CITY, 2021 HO CHI MINH CITY, 2019 STATE BANK OF VIET NAM MINISTRY OF EDUCATION AND TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY  TRANG DIEU AI THE FACTORS AFFECTING CAATs ADOPTION EVIDENCE IN HO CHI MINH CITY GRADUATION THESIS MAJOR: ACCOUNTING AND AUDITING CODE: 7340301 RESEARCH INSTRUCTOR DR NGUYEN THI MAI HUONG HO CHI MINH CITY, 2021 ABSTRACT The main content of the thesis is to identify the factors affecting the adoption of computer -aided audit tools (CAATs) to external auditors, thereby proposing solutions to the CAATs adoption of the auditing firms in Ho Chi Minh City.The thesis has presented the CAATs adoption in Vietnam in recent years, the orientation of the Government, experts on this issue and the trend of using CAATs in the audit field to provide general comments on the CAATs adoption in external audit Besided, to synthesize previous studies, we have applied the UTAUT model (Venkatesh et al., 2003) with appropriate adjustments based on the research context, the author has obtained 185 responses from professional staff working at 16 auditing companies in Ho Chi Minh City With the support of SPSS software version 26.0, the author uses tools such as Cronbach's alpha Test to assess the reliability of the scale, Exploratory factor analysis (EFA), Correlation analysis, Multiple linear regression analysis leading to a research model with factors affecting CAATs adoption including:(1) Performance expectancy, (2) Effort expectancy, (3) Social influence, (4) Facilitating conditions The results show that the most influential factor is “Effort expectancy” and the least influencing factor is “Social influence” (with Beta coefficients of 0.375 and 0.165, respectively Then, “Facilitating conditions" and " Performance Expectancy" is the second and third largest influential factor with Beta coefficients in the regression is 0.371 and 0.193, respectively) Therefore, it is clear that characteristics relating to human are essential and important for increasing adoption of CAATs Hence, the main role of auditing firms is to facilitate as much as possible to maintain and develop its human resources in the company Key words: CAATs Adoption, Performance Expectancy, Effort Expectancy, Social Influcence, Facilitating Conditions DECLARATION OF AUTHENCITY I the undersigned declare that all material presented in this paper is my own work or fully and specifically acknowledged wherever adapted from other sources I understand that if at any time it is shown that I have significantly misrepresented material presented here, any degree or credits awarded to me on the basis of that material may be revoked I declare that all statements and information contained herein are true, correct and accurate to the best of my knowledge and belief Ho Chi Minh City, 27 March , 2021 Trang Dieu Ai ACKNOWLEDGEMENTS First at all, I would like to express my sincerest and deepest thankfulness to Dr Nguyen Thi Mai Huong for her guidance and patience in giving me valuable recommendations during my study period I am really happy and fortunate to carry out this study under her supervisor Secondly, I would like to send my profound gratitude to all of the lecturers in Accounting and Auditing Department and also in Office of Academic Affairs during a period of studying for a bachelor degree at Banking University of Vietnam Lastly, I would like to thank my family for their support during my study and during my life Without whose encouragement and sacrifice, I would not have finished this thesis, so I express my special love and gratitude to them Warmest regards Trang Diệu Ái TABLE OF CONTENTS ABSTRACT i DECLARATION OF AUTHENCITY ii ACKNOWLEDGEMENTS iii TABLE OF CONTENTS iv LIST OF ABBREVIATIONS vii LIST OF TABLES ix LIST OF FIGURES AND DIAGRAM xi CHAPTER INTRODUCTION 1.1 The necessity of the topic 1.2 Overview of related research 1.2.1 Research on the development of information technology systems 1.2.2 Research on the development of CAATs 1.2.3 audit Research on the factors affecting the CAATs adoption in the field of FSs 1.3 Objectives of the Research 12 General objective: 12 Detailed objective: 12 1.4 Questions of the Research 13 1.5 Subjects of the Research and Scopes of the Research 13 Scopes of the study 13 1.6 The Research Methodology 13 1.7 Expected contribution of the Research 14 1.8 Thesis Structure 14 CHAPTER 16 THEORY FOUNDATION ON CAATs 16 2.1 DEFINITION AND ROLE OF CAATs 16 2.1.1 Definiton 16 2.1.2 The role of CAATs in FSs audit 19 2.1.3 Responsibility and requirement for auditor in the application of CAATs 22 2.2 OVERVIEW OF CAATs 24 2.2.1 General features 24 2.2.2 International standards for CAATs 27 2.2.3 Auditing tools and techniques of CAATs 29 2.3 FACTORS AFFECTING THE APPLICATION OF CAATs 31 2.3.1 Performance Expectancy 32 2.3.2 Effort Expectancy 34 2.3.3 Social Influcence 35 2.3.4 Facilitating Conditions 36 CHAPTER 39 THE RESEARCH DESIGN 39 3.1 RESEARCH PROCESS 39 3.2 RESEARCH METHODS 39 3.3 SAMPLE DESCRIPTION 42 3.4 DATA SOURCE 45 3.5 BUILDING THEORY AND RESEARCH MODEL 46 3.5.1 Scales of research design 46 3.5.2 The questionnaire design 50 3.6 PROPOSED RESEARCH MODEL 51 CHAPTER 55 THE EMPIRICAL RESULTS 55 4.1 GENERAL SITUATION OF CAATs ADOPTON IN VIETNAM 55 4.2 DESCRIPTIVE AND FREQUENCY STATISTICS 58 4.2.1 Description of survey data 58 4.2.2 Descriptive statistics 61 4.2.3 Frequency statistics 62 4.3 ANALYZE AND EVALUATE THE SCALES 67 4.3.1 Evaluate the reliability of the scales 67 4.3.2 Exploratory Factor Analysis – EFA 68 4.4 TEST THE RESEARCH MODEL AND HYPOTHESES 72 4.4.1 Test the hypotheses 72 4.4.2 Results of correlation analysis and multivariate regression 76 CHAPTER 86 DISCUSSION OF RESEARCH RESULTS AND PROPOSAL RECOMMENDATIONS 86 5.1 DISCUSSION OF RESEARCH RESULTS 86 5.2 PROPOSAL RECOMMENDATIONS 89 5.2.1 Impact on the factor “Performance Expectancy” 90 5.2.2 Impact on the factor “Effort Expectancy” 91 5.2.3 Impact on the factor “Social Influence” 93 5.2.4 Impact on the factor “Facilitating Conditions” 94 5.3 SOME LIMITATION OF THE STUDY 96 5.3.1 Limitation 96 5.3.2 Future studies 96 GENERAL CONCLUSION 98 REFERENCES xiii APPENDIX xviii LIST OF ABBREVIATIONS Abbreviations originated from Vietnamese words FS Financial of Statement HCM city Ho Chi Minh city VN Viet Nam VACPA Vietnam Association of Certified Public Accountants HoSE Ho Chi Minh Stock Exchange BOD Board of Directors MoF Ministry of Finance VAS Vietnamese Accounting Standards Abbreviations originated from English words AICPA American Institute of Certified Public Accountants AIS Accounting Information System BEAST Beneficial Electronic Audit Support Tools CAATs Computer-assisted audit tools Computer-aided audit tools EFA Exploratory Factory Analysis GAAPs Generally Accepted Accounting Principles GAS General Audit Software IAASB International Auditing and Assurance Standards Board ISQC International Standard on Quality Control IT Information technology PCAOB United States Public Company Accounting Oversight Board PIOB Public Interest Oversight Board SPSS Statistical Package for the Social Sciences SAS Statistical Analysis System TPB Theory of planning behavior of awareness and habit of using CAATs in the company, colleagues and senior leaders will also consciously support, motivate and encourage employees to apply CAATs more 5.2.4 Impact on the factor “Facilitating Conditions” The research results have showed that Facilitating Conditions are one of the factors that positively affect the CAATs Adoption in the field of external audit It means that the better the facilitating conditions, the higher intentions of adopting CAATs by auditors These social influences relate to the documentation, facilities required for the use of CAATs and the available assistance to assist the auditors in using CAATs by a particular person (or group) Therefore, the solution to improve facilitating conditions is:  On the view of government and professional organizations: - After the State Audit completed the content of the strategic project to modernize the State Bank's operations, step by step consolidating the internal control-accounting system to develop a detailed plan on IT application in accordance with general trend, deploying software development plan and connecting computer network system between control-internal accounting and professional operations, State Audit and related organizations based on the above project to build the next project aimed at a external auditors - It is necessary to supplement and train informatics knowledge for accounting staff to gradually approach the control of risk factors in professional software and research on application of CAATs - Periodically evaluate the quality of auditors / auditing companies on the application of CAATs - Arranging specific agencies is always ready to guide and answer issues related to CAATs  On the view of auditing firms: - As the data processing businesses thrive, it will allow auditors to apply new achievements to their work This is very beneficial when the documents and data related to the control and audit issues are available in the "data storage" in large volume When performing the audit needs to be handled, and at the same time create the ability in making statistical forms depending on the objective of the audit - Research to build audit software strong enough to be able to exploit output information from professional software and perform analysis according to the requirements of auditors, giving results to help auditors evaluate and comment on ability and level of risk for each professional accounting-finance segment thereby deciding on-site audit programs and plans suitable to the activities of each unit as well as for each specific business - Increase training time and training to use CAATs - Prepare all necessary material and material resources for the use of CAATs - There should be individuals, sub-departments in charge of CAATs in the company However, the problem when increasing facilitating conditions for CAATs also comes with increasing costs of businesses and difficulty in evaluating the benefits and costs of CAATs Therefore, companies also need to pay attention to increase costs according to the above activities and balance them properly so as not to increase costs more than revenue Companies should strengthen internal inspection and control of costs on the basis of building cost norms and cost estimates 5.3 SOME LIMITATION OF THE STUDY 5.3.1 Limitation Each study has its own limitations, so does this thesis These limitations are mentioned as follows: - Firstly, this study only considers independent audit, not others such as state audit or internal audit - Second, this study is only done at auditing firms in Ho Chi Minh City In particular, these businesses are providing services to 100 businesses listed on HoSE - Third, the number of participants is only 185 people, the main object of which is seniors and assistants - Finally, the study examines the effects of more than one factor on the CAATs Adoption, so the results may not be as in-depth as the individual studies 5.3.2 Future studies The future direction for the CAATs adoption in auditing generally and independent audit in particular can develop in many aspects as follows: - -Expand future research for state audit and internal audit activities - Conduct research studies at the national level to improve the generality of research results - If the survey is conducted with a larger number of participants, especially industry experts, high-level employees, the results will be more general - Further studies can focus on the impact of each factor on CAATs adoption CONCLUSION OF CHAPTER Chapter presents summary results of the study, from which proposing policy implications on factors affecting CAATs adoption in audit procedures The solutions focusing on factors influencing the application of CAATs are identified in Chapter These are (1) Performance Expectancy, (2) Effort Expectancy, (3) Social Influence and (4) Facilitating Conditions This chapter also describes limitations and directions for future research GENERAL CONCLUSION The adoption of IT in auditing activities is an inevitable trend in this era, when businesses increasingly depend on computer systems in recording and processing professional transactions Auditing companies need to focus on developing modern audit technologies and techniques, to improve audit quality and efficiency This requires the auditing firms to have a substantial investment in the acquisition or development of professional audit software However, this investment is necessary and will take effect in the future In addition, State regulators and Professional Associations can assist audit firms, in human resource training and technological assistance For small and medium audit firms, have access to modern audit tools REFERENCES Domestic References: Hà Thị Ngọc Hà (2012), Các giải pháp hồn thiện, tăng cường kiểm sốt chất lượng cơng tác kiểm tốn báo cáo tài đơn vị có lợi ích cơng chúng Đề tài nghiên cứu khoa học cấp Ngành, Bộ Tài Lê Thị Thu Hà (2015), Giải pháp nâng cao chất lượng kiểm tốn báo cáo tài ngân hàng thương mại Việt Nam”, Đề tài nghiên cứu khoa học, Học viện Ngân hàng Lê Thị Thu Hà, 2018, Ứng dụng cơng nghệ thơng tin kiểm tốn báo cáo tài chính, http://www.hoiketoanhcm.org.vn Vũ Văn Cường Nguyễn Thị Thanh Loan, 2019, Quy trình phương pháp kiểm tốn mơi trường cơng nghệ thơng tin Kiểm tốn Nhà nước, Cổng thơng tin điện tử Kiểm toán Nhà Nước Việt Nam Abroad Refereces: Beniger, R (1986), The Control Revolution: Technological and economic origins of the information society, Cambridge, MA: Harvard University Press Davis, F D (1989) Perceived usefulness, perceived ease of use, 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(CAATs) by external Auditors in Yemen, International Journal of Accounting and Financial Reporting, ISSN 2162-3082, 2020, Vol.10, No.2 36 ACCA Technical articles, Specific aspects of auditing in a computer-based environment APPENDIX Appendix Cronbach’s alpha Factor Scale Mean if Item Deleted Scale Corrected Cronbach’s Variance if Item- Total alpha if Item Item Deleted Correlation Deleted PE : α = 0.814 PE1 11.59 2.265 684 PE2 11.77 2.603 531 PE3 11.58 2.506 658 PE4 11.57 2.344 665 EE : α = 0.852 EE1 11.56 3.747 639 EE2 11.56 3.379 757 EE3 11.65 3.631 651 EE4 11.64 3.589 727 SI : α = 0.837 SI1 11.68 3.492 591 SI2 11.62 3.465 685 SI3 11.59 3.352 760 SI4 11.75 3.405 652 FC : α = 0.826 FC1 7.79 1.577 668 FC2 7.69 1.508 694 FC3 7.72 1.549 684 General assessment of the CAATs adoption : α = 0.857 CAAT1 11.70 3.527 682 CAAT2 11.62 3.140 718 CAAT3 11.73 3.492 659 CAAT4 11.77 3.220 747 740 812 756 750 834 783 830 798 830 788 756 802 773 747 758 825 811 834 797 Appendix SURVEY QUESTIONNAIRE Dear Sir/Madam: My name is Trang Dieu Ai I am currently a senior student studying Accounting and Auditing major at Banking University of Ho Chi Minh City My ongoing thesis is “The factors affecting CAATs Adoption– evidence in Ho Chi Minh city” I hope that you can take a little your valuable time helping me answer this questionnaire so that I have a basis for presenting the facts and solutions in the thesis Your answer is only for research purpose, thus, all personal information is confidential Please complete the questionnaire below by ticking an option form 1-5 on the rating scale (5 being strongly agree/ being strongly disagree), in response to the following statements Part – General information Audit firms you are currently working for: Part – Statistical information Which position you currently work in the company? a Partner/ Director b Audit Manager e Others c Audit Senior d Audit Assistant How many years of experience in accounting, auditing, finance and taxation? a Over 10 years b From to under 10 years c From to under years d Under years How many employees in your company? a Over 400 staff b From 100 to under 400 staff c From 50 to 100 staff d From 20 to under 50 staff e Under 20 staff How many practicing auditors in your company? a Over 60 auditors b From 30 to under 60 auditors c From 10 to under 30 auditors e Under auditors d From to under 10 auditors What is the average fee of each service provided of your company? a Over 120 million VND b From 70 to under 120 million VND c From 30 to under 70 million VND d From 15 to under 30 million VND e Under 15 million VND Part – Factors affecting the CAATs Adoption (1) Strongly disagree – (2) Disagree – (3) Normal – (4) Agree – (5) Strongly agree (2) List I N1 Criteria Scale Factors affecting CAATs Adoption Performance Expectancy (PE) I find computer assisted audit techniques (CAATs) useful in my job Using CAATs enables me to accomplish tasks Using CAATs increase my productivity If I use CAATs, I will increase my chance of increasing quality of audit N2 Effort Expectancy (EE) My interaction with CAATs is clear Getting the skills to use computer assisted audit 5 5 techniques is easy for me It is easy for me to use computer assisted audit techniques Learning how to operate CAATs is an easy process N3 Social Influence (SI) Individuals who influence my behavior think that I should use CAATs 10 Individuals who are significant to me believe been In general, our firm has supported the use of 5 that I should use CAATs 11 My firm seniors managers have cooperative in the use of CAATs 12 CAATs N4 Facilitating Conditions (FC) 13 The resources necessary to use CAATs are sufficient and appreciate 14 I have knowledge necessary to use CAATs 15 Assistance is available for me with CAATs difficulties by specific person (or group) II Overall assessment of CAATs Adoption I intend to use CAATs in the future I forecast I would use CAATs in the coming I plan to use CAATs in my work I would like to use computers in future rather than any other traditional method Best thanks for completing the survey! ... VIET NAM MINISTRY OF EDUCATION AND TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY  TRANG DIEU AI THE FACTORS AFFECTING CAATs ADOPTION EVIDENCE IN HO CHI MINH CITY GRADUATION THESIS MAJOR:... CAATs in Ho Chi Minh City; - Proposing solutions to enhance CAATs in Ho Chi Minh City 1.4 Questions of the Research Q1: What factors are affecting CAATs? Q2: What factors are affecting CAATs in HCMC?... tools (CAATs) to external auditors, thereby proposing solutions to the CAATs adoption of the auditing firms in Ho Chi Minh City .The thesis has presented the CAATs adoption in Vietnam in recent