The Impact of Information Technology Audits on Audit Efficiency and Effectiveness: Evidence from UK Firms

Abstract

This study investigates the role of information technology audits in enhancing audit efficiency and effectiveness, focusing on empirical evidence from United Kingdom firms between 2016 and 2022. As firms become increasingly reliant on digital systems, the integration of information technology audit practices becomes a critical component of both internal and external assurance functions. The research utilizes a panel firm-level dataset and applies econometric techniques, including fixed-effects regression, to evaluate how variables such as automation tools, information technology audit integration, auditor competency, and information technology audit budget influence audit outcomes. The results indicate that practices like automation and integration have a statistically significant positive effect on audit performance. Additionally, budgetary allocation and information technology competency contribute substantially to audit efficiency and effectiveness. However, audit frequency alone does not show a strong correlation, highlighting the importance of strategic integration and audit quality over procedural repetition. The findings have practical implications for policymakers, audit practitioners, and organizations seeking to optimize audit functions in a digital environment. Recommendations include regulatory support for information technology audit adoption, increased investment in audit automation, and upskilling audit professionals in information technology competencies.

Keywords: IT Audit, Audit Efficiency, Audit Effectiveness, Audit Automation