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Top1. Introduction
Information technology (IT) has affected most professions in the economic environment, including the accounting profession (Emmanouilidis & Economides, 2010). The International Federation of Accountants (IFAC) in its report released in 2017 claimed that today’s accounting profession had no choice but to adopt digital technologies in their daily routine (IFAC, 2017). In 2015, the report of PricewaterhouseCoopers (PwC) assumed that the next decade would witness the end of many current jobs, disappearing entirely or partially with a 97.5% probability, accounting was being at the top of the list (PwC, 2015). However, senior accountants working in large companies unanimously argue about the undeniable importance of human accountants as they are indispensable for firms and will not be replaced by technology in the future. Auditing skills are likely to differ and need to develop (Marrone & Hazelton, 2019). Accounting is a business field that is expected to improve by technology instead of being fully automated (Davenport & Kirby, 2016). Among the accounting professions that are associated with the integration of IT is the auditing job. In the business environment, users of financial reports depend on the auditor’s judgment about whether or not the financial disclosures prepared by management are free from fraud (intentional mistakes) and material errors (unintentional mistakes) (Blewett & O’Keeffe, 2011). Therefore, the auditors’ work revolves around a world of changes in which they face major corporate scandals, such as One-Tel (Australia), Parmalat (Italy), Global Crossing and Enron (United States), the Yemeni National Commercial Bank (Yemen) and Almanakhah Market (Kuwait) (Al-Ansi, 2015).
Information technology is crucial for the audit function (Pedrosa, Costa, & Aparicio, 2019). The role of audit software, for example, Computer-Assisted Audit Tools and Techniques (CAATTs), enables auditors to access almost all business data in an organisation, to analyses and verify financial statements' data; to conduct control and compliance tests, which enhances the assessment of each business transaction and hence greatly improves the reliability of outcomes, shortens the auditing hours required and achieves better cost-effectiveness (Laureano & Pedrosa, 2016; Pedrosa et al., 2019). Therefore, the audit function and strategy should coordinate with IT-based clients for audit report preparation (Bierstaker, Janvrin, & Lowe, 2014).
Professional accounting bodies, such as the “American Institute of Certified Public Accountants (AICPA), IFAC and Information Systems Audit and Control Association’s (ISACA)” have laid down regulations and guidelines addressing IT-based auditing to urge audit firms and auditors to use them (Bierstaker et al., 2014). However, CAATs are not extensively used among auditors (Bierstaker et al., 2014; Rosli, Siew, & Yeow, 2016).
Previous studies have reported the low level of IT competency among auditors (Al-Duwaila & Abdullah, 2017; Greenstein & McKee, 2004). In Yemen, the lack of IT skills among auditors has contributed to the inaccuracies in audit reports issued for companies (Al-Ansi, 2015). For example, the collapse of the National Bank for Trade and Investment, one of the major banks in Yemen, was caused by fraud committed by the bank's board of directors. The external auditors faced difficulties and obstacles in accessing, interpreting and analysing the information systems of the clients' data because of their lack of skills and knowledge in IT (Al-Ansi, 2015). Instead, the auditors issued a clean report (Central Organization for Controlling and Accounting (COCA), 2007). In developing countries, such as Yemen, accounting organisations that are responsible for establishing local standards, adopting international accounting standards, providing guidelines in using computer-assisted audit techniques and supervising their implementation do not exist (Al-Kharbi, 2010). Information technology audit practice among audit firms in Yemen is still in its infancy or at the minimum level (Al-Ansi et al., 2017). Although many studies have been conducted in developed and developing countries on IT competence (Al-Duwaila & Abdullah, 2017; Bahador, Haider, & Saman, 2018; Spraakman, O’Grady, Askarany, & Akroyd, 2015), there is almost no study on IT competence in Yemen.