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Emerging Technologies To Detect Fraud in Audit Testing: A Perception of Malaysian Big Four Auditors

Fraud surveys performed over the past decade remained at worrying levels in Malaysia. The Malaysian 1MDB scandal has attracted worldwide attention which severely damaged the local auditing profession, worsening the credibility crisis in the sector. The rise of emerging technologies is seen to bridge the expectation gap in strengthening stakeholder confidence in auditors by easing fraud detection. Unfortunately, a past study in Malaysia on task-technology fit between auditor’s knowledge and perceived importance on technology revealed a gap. A report by the Malaysian Institute of Accountants in 2019 highlighted that the lagging factor of emerging technology adoption in Malaysia is due to auditors’ non-realization of its usefulness in fraud detection. Furthermore, to render emerging technology as a useful medium for data extraction and analysis higher levels of scepticism is required. Besides, focus is placed on data quality as the accuracy of testing is heavily reliant on the input. Hence, this study intends to find whether there is a relationship between the perception of Malaysian Big Four external auditors and fraud detection in the audit testing phase. An online questionnaire based on a 5-point Likert scale was distributed and received responses from 108 external auditors where data was coded and input into the SPSS for further analysis. The results show that Malaysian Big Four external auditor’s perception of emerging technology affects the use for fraud detection in audit testing. As this study could not be generalized, further research should consider looking from the time constraints viewpoint or to study auditors from a similar firm for a greater understanding of their perception since firms have different degree of emerging technology adoption.