Developing a Theory of Auditing Behavior in the Electronic Business Environment

Auditing in an electronic world is different from auditing in a paper-based world. Our purpose in this study is to develop a theory of auditing behavior in the e-business environment. We collect data by interviewing auditors in the field and organize the data into three perspectives held by auditors: the technological, social/organizational, and socio-technical perspectives. Based on the rich details of the auditors' three perspectives, we formulate a theory that explains an auditor's behavior in an electronic business environment as resulting from six factors: audit objective, professional orientation, professional standards, professional responsibility, professional reputation, and legal liability. Unlike the current claim that technology is the sole cause of current auditing challenges and the sole source of solution; the study reveals and highlights the role played by social, organizational and institutional factors in shaping the professional change in auditing caused by the increased use of electronic business and information technologies. The study further shows that failure to consider the relevant social, organizational, and institutional factors in explaining the auditing behavior will result in misguided conclusions and sub-optimal resolutions