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Do Audit Data Analytics Influence Juror Perceptions of Audit Quality and Auditor Negligence?

Dereck Barr-Pulliam, PhD Helen L. Brown-Liburd Amanda Gates Carlson
American Accounting Association. November 11, 2023

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We summarize a recent study that examines whether and how the signals provided by the internal control (ICFR) opinion and auditor use of advanced data analytic tools (ADAs) influence juror negligence perceptions. When auditors issue an unqualified ICFR opinion and rely on traditional statistical sampling, jurors assess the auditors as more negligent than when the auditors use ADAs. Conversely, when auditors issue an adverse ICFR opinion, jurors ascribe less blame to auditors and more to investor plaintiffs regardless of whether the auditors use ADAs. Further, jurors perceive auditors as less negligent when they use ADAs for full population testing because they perceive ADAs to be an indicator of higher audit quality. Interestingly, jurors perceive no difference in the level of assurance provided by the audit opinion alone when auditors use ADAs relative to traditional sampling testing methods.