Auditor automation usage and professional skepticism

Audit firms increasingly use automated tools and techniques to conduct structured audit tasks. As a result, auditors’ role shifts from preparing workpapers to reviewing and validating the work conducted by the automation. Amid these developments, regulators have expressed concerns that auditors may rely too heavily on automated outputs, which could potentially lead to behavioral biases and reductions in audit effectiveness.

Using an experiment with 119 professional auditors, I predict and find that auditors are subject to  automation bias – the tendency to use automated cues as a heuristic replacement for vigilant information seeking and processing. Specifically, I find that auditors reduce effort and are less effective in reviewing work conducted by automated tools compared to reviewing identical work conducted by a human colleague. To alleviate the negative effects of automation on reviewer effectiveness, I employ a theory-driven counterarguing mindset intervention. Consistent with my predictions, I find that this intervention alleviates the reductions in effort and effectiveness induced by automation. Additionally, this study also investigates whether the reduction in effectiveness caused by automation spills over to unrelated subsequent tasks, in which no automation is used. The results do not display any spillover effects.