The factors affecting CAATs adoption - evidence in Ho Chi Minh City: Bachelor thesis of Accounting and Auditing / Trang Dieu Ai ; Nguyen Thi Mai Huong supervisor

STATE BANK OF VIET NAM MINISTRY OF EDUCATION AND TRAINING

BANKING UNIVERSITY OF HO CHI MINH CITY

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TRANG DIEU AI

THE FACTORS AFFECTING CAATs

ADOPTION – EVIDENCE IN HO CHI MINH

CITY

GRADUATION THESIS

MAJOR: ACCOUNTING AND AUDITING

CODE: 7340301

HO CHI MINH CITY, 2021

HO CHI MINH CITY, 2019

STATE BANK OF VIET NAM MINISTRY OF EDUCATION AND TRAINING

BANKING UNIVERSITY OF HO CHI MINH CITY

--------

TRANG DIEU AI

THE FACTORS AFFECTING CAATs ADOPTION

EVIDENCE IN HO CHI MINH CITY

GRADUATION THESIS

MAJOR: ACCOUNTING AND AUDITING

CODE: 7340301

RESEARCH INSTRUCTOR

DR. NGUYEN THI MAI HUONG

HO CHI MINH CITY, 2021

ABSTRACT

The main content of the thesis is to identify the factors affecting the adoption of

computer -aided audit tools (CAATs) to external auditors, thereby proposing solutions

to the CAATs adoption of the auditing firms in Ho Chi Minh City.The thesis has

presented the CAATs adoption in Vietnam in recent years, the orientation of the

Government, experts on this issue and the trend of using CAATs in the audit field to

provide general comments on the CAATs adoption in external audit. Besided, to

synthesize previous studies, we have applied the UTAUT model (Venkatesh et al.,

2003) with appropriate adjustments based on the research context, the author has

obtained 185 responses from professional staff working at 16 auditing companies in Ho

Chi Minh City. With the support of SPSS software version 26.0, the author uses tools

such as Cronbach's alpha Test to assess the reliability of the scale, Exploratory factor

analysis (EFA), Correlation analysis, Multiple linear regression analysis leading to a

research model with 4 factors affecting CAATs adoption including:(1) Performance

expectancy, (2) Effort expectancy, (3) Social influence, (4) Facilitating conditions.

The results show that the most influential factor is “Effort expectancy” and the

least influencing factor is “Social influence” (with Beta coefficients of 0.375 and

0.165, respectively. Then, “Facilitating conditions" and " Performance Expectancy" is

the second and third largest influential factor with Beta coefficients in the regression is

0.371 and 0.193, respectively). Therefore, it is clear that characteristics relating to

human are essential and important for increasing adoption of CAATs. Hence, the main

role of auditing firms is to facilitate as much as possible to maintain and develop its

human resources in the company.

Key words: CAATs Adoption, Performance Expectancy, Effort Expectancy,

Social Influcence, Facilitating Conditions.

DECLARATION OF AUTHENCITY

I the undersigned declare that all material presented in this paper is my own work

or fully and specifically acknowledged wherever adapted from other sources.

I understand that if at any time it is shown that I have significantly

misrepresented material presented here, any degree or credits awarded to me on the

basis of that material may be revoked.

I declare that all statements and information contained herein are true,

correct and accurate to the best of my knowledge and belief.

Ho Chi Minh City, 27 March , 2021

Trang Dieu Ai

ACKNOWLEDGEMENTS

First at all, I would like to express my sincerest and deepest thankfulness to Dr Nguyen

Thi Mai Huong for her guidance and patience in giving me valuable recommendations

during my study period. I am really happy and fortunate to carry out this study under

her supervisor.

Secondly, I would like to send my profound gratitude to all of the lecturers in

Accounting and Auditing Department and also in Office of Academic Affairs during a

period of studying for a bachelor degree at Banking University of Vietnam.

Lastly, I would like to thank my family for their support during my study and during

my life. Without whose encouragement and sacrifice, I would not have finished this

thesis, so I express my special love and gratitude to them.

Warmest regards.

Trang Diệu Ái

TABLE OF CONTENTS

ABSTRACT......................................................................................................................i

DECLARATION OF AUTHENCITY ............................................................................ii

ACKNOWLEDGEMENTS ........................................................................................... iii

TABLE OF CONTENTS................................................................................................iv

LIST OF ABBREVIATIONS........................................................................................vii

LIST OF TABLES ..........................................................................................................ix

LIST OF FIGURES AND DIAGRAM...........................................................................xi

CHAPTER 1.....................................................................................................................1

INTRODUCTION............................................................................................................1

1.1. The necessity of the topic ...................................................................................1

1.2. Overview of related research..............................................................................2

1.2.1 Research on the development of information technology systems .............2

1.2.2 Research on the development of CAATs ....................................................4

1.2.3 Research on the factors affecting the CAATs adoption in the field of FSs

audit 6

1.3. Objectives of the Research ...............................................................................12

General objective:..................................................................................................12

Detailed objective: .................................................................................................12

1.4. Questions of the Research ................................................................................13

1.5. Subjects of the Research and Scopes of the Research......................................13

Scopes of the study ................................................................................................13

1.6. The Research Methodology..............................................................................13

1.7. Expected contribution of the Research.............................................................14

1.8. Thesis Structure ................................................................................................14

CHAPTER 2...................................................................................................................16

THEORY FOUNDATION ON CAATs........................................................................16

2.1 . DEFINITION AND ROLE OF CAATs.......................................................16

2.1.1. Definiton ....................................................................................................16

2.1.2. The role of CAATs in FSs audit ................................................................19

2.1.3. Responsibility and requirement for auditor in the application of CAATs 22

2.2 OVERVIEW OF CAATs .................................................................................24

2.2.1. General features.........................................................................................24

2.2.2. International standards for CAATs............................................................27

2.2.3. Auditing tools and techniques of CAATs..................................................29

2.3 FACTORS AFFECTING THE APPLICATION OF CAATs .........................31

2.3.1. Performance Expectancy ...........................................................................32

2.3.2. Effort Expectancy ......................................................................................34

2.3.3. Social Influcence........................................................................................35

2.3.4. Facilitating Conditions...............................................................................36

CHAPTER 3...................................................................................................................39

THE RESEARCH DESIGN ..........................................................................................39

3.1. RESEARCH PROCESS...................................................................................39

3.2. RESEARCH METHODS.................................................................................39

3.3. SAMPLE DESCRIPTION ...............................................................................42

3.4. DATA SOURCE ..............................................................................................45

3.5. BUILDING THEORY AND RESEARCH MODEL.......................................46

3.5.1. Scales of research design ...........................................................................46

3.5.2. The questionnaire design ...........................................................................50

3.6. PROPOSED RESEARCH MODEL.................................................................51

CHAPTER 4...................................................................................................................55

THE EMPIRICAL RESULTS .......................................................................................55

4.1. GENERAL SITUATION OF CAATs ADOPTON IN VIETNAM.................55

4.2. DESCRIPTIVE AND FREQUENCY STATISTICS.......................................58

4.2.1. Description of survey data .........................................................................58

4.2.2. Descriptive statistics..................................................................................61

4.2.3. Frequency statistics....................................................................................62

4.3. ANALYZE AND EVALUATE THE SCALES...............................................67

4.3.1. Evaluate the reliability of the scales..........................................................67

4.3.2. Exploratory Factor Analysis – EFA ..........................................................68

4.4. TEST THE RESEARCH MODEL AND HYPOTHESES ..............................72

4.4.1. Test the hypotheses....................................................................................72

4.4.2. Results of correlation analysis and multivariate regression ......................76

CHAPTER 5...................................................................................................................86

DISCUSSION OF RESEARCH RESULTS AND PROPOSAL

RECOMMENDATIONS ...............................................................................................86

5.1. DISCUSSION OF RESEARCH RESULTS ....................................................86

5.2. PROPOSAL RECOMMENDATIONS............................................................89

5.2.1. Impact on the factor “Performance Expectancy” ......................................90

5.2.2. Impact on the factor “Effort Expectancy” .................................................91

5.2.3. Impact on the factor “Social Influence” ....................................................93

5.2.4. Impact on the factor “Facilitating Conditions”..........................................94

5.3. SOME LIMITATION OF THE STUDY .........................................................96

5.3.1. Limitation...................................................................................................96

5.3.2. Future studies.............................................................................................96

GENERAL CONCLUSION ..........................................................................................98

REFERENCES............................................................................................................. xiii

APPENDIX................................................................................................................ xviii

LIST OF ABBREVIATIONS

1. Abbreviations originated from Vietnamese words

FS Financial of Statement

HCM city Ho Chi Minh city

VN Viet Nam

VACPA Vietnam Association of Certified Public

Accountants

HoSE Ho Chi Minh Stock Exchange

BOD Board of Directors

MoF Ministry of Finance

VAS Vietnamese Accounting Standards

2. Abbreviations originated from English words

AICPA American Institute of Certified Public

Accountants

AIS Accounting Information System

BEAST Beneficial Electronic Audit Support Tools

CAATs Computer-assisted audit tools

Computer-aided audit tools

EFA Exploratory Factory Analysis

GAAPs Generally Accepted Accounting Principles

GAS General Audit Software

IAASB International Auditing and Assurance

Standards Board

ISQC International Standard on Quality Control

IT Information technology

PCAOB United States Public Company

Accounting Oversight Board

PIOB Public Interest Oversight Board

SPSS Statistical Package for the Social Sciences

SAS Statistical Analysis System

TPB Theory of planning behavior

LIST OF TABLES

Table 1.1: Measure the independent variables in the model .........................................11

Table 2.1: Comparison between traditional audit and audit with CAATs adoption .....28

Table 3.1: Synthesize the number of audit firms provide independent audit service for

100 listed companies on HoSE.......................................................................................43

Table 3.2: The statistical inspection of audit firms classified by size............................44

Table 3.3: Questionnaire structure and the scale..........................................................50

Table 3.4: Hypotheses of the correlation between independent variables and CAATs

Adoption .........................................................................................................................53

Table 4.1: Experiences and position of survay objects..................................................58

Table 4.2: Structure of audit firms.................................................................................59

Table 4.3: Average annual net revenue of audit firms collected from Website of

VACPA, last updated on 29/5/2018 ...............................................................................59

Table 4.4: The number of professional staff and auditors.............................................60

Table 4.5: Descriptive statistics of all variables............................................................61

Table 4.6: Frequency statistics of “CAATs Adoption”..................................................62

Table 4.7: Frequency statistics of “Performance Expectancy” ....................................63

Table 4.8: Frequency statistics of “Effort Expectancy”................................................64

Table 4.9: Frequency statistics of “Social Influcence”.................................................65

Table 4.10: Frequency of “Facilitating Conditions” ....................................................66

Table 4.11: KMO and Bartlett Test ...............................................................................68

Table 4.12: Total Variance Explained...........................................................................69

Table 4.13: Rotated Component Matrix ........................................................................70

Table 4.14: Summary of Testing methods Research Summary of Testing Hypotheses .73

Table 4.15: Correlation between PE and CAATs Adoption ..........................................73

Table 4.16: Correlation between EE and CAATs Adoption ..........................................74

Table 4.17: Correlation between SI and CAATs Adoption............................................74

Table 4.18: Correlation between FC and CAATs Adoption ..........................................75

Table 4.19: Summary of Testing Hypotheses.................................................................75

Table 4.20: Correlation matrix (Pearson) among CAATs Adoption and independent

variables.........................................................................................................................76

Table 4.21: Model Summary ..........................................................................................78

Table 4.22: ANOVAa

......................................................................................................79

Table 4.23: Results of regression model........................................................................82