Adoption and Use of Generalized Audit Software by Indonesian Audit Firms
A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy
Rindang Widuri
B. Comp. Studies
Master of Management
School of Accounting
College of Business
RMIT University
August 2014
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DECLARATION
I certify that except where due acknowledgement has been made, the work is that of the
author alone, the work has not been submitted previously, in whole or in part, to qualify for
any other academic award; the content of the thesis is the result of work which has been
carried out since the official commencement date of the approved research program; any
editorial work, paid or unpaid, carried out by a third party is acknowledged; and, ethic
procedures and guidelines have been followed.
Rindang Widuri
29 August 2014
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ACKNOWLEDGEMENT
I would like to express gratitude to the people who assisted me during the process of
researching and writing this thesis. I am indebted to Professor Brendan O‟Connell, my
primary supervisor whose excellent supervision and commitment inspired my work. It would
have been difficult to complete my thesis without his guidance, patience, insightful questions
and constructive criticism. He provided continual encouragement and intellectual inspiration,
particularly in the earlier stages. During that time, he was patient and encouraged me to
believe in myself and it has been my honour to be his student.
I would like to show appreciation for my second supervisor, Associate Professor Prem
Yapa‟s comments, suggestions and motivation in the process of writing my thesis. I am
grateful for his friendly encouragement and enthusiasm.
I acknowledge the Australian Government‟s valuable contribution in providing me with
financial support through the Australia Awards Scholarship Program. I am grateful for the
opportunity it provided to me to undertake this course of study.
Special appreciation is dedicated to my family, especially my parents, for their
encouragement and support. Their understanding of my absence from special family events
during the last four years was important to me. It is impossible to not to express my gratitude
to my husband Deni and my daughter Widiya who always cheered me up with her lovely
smile. I appreciate their decision to accompany and support me during this study. I thank him
for his motivation, understanding and patience during my toughest moments and hope I can
do the same for them both in the future.
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I appreciate the support provided by all participants involved in this study and their time,
opinions and comments were invaluable. I also would like to take this opportunity to
acknowledge Jennifer Leslie as the proof-reader and editor of my thesis. I appreciate her
patience and enlightening comments about my writing style.
I thank my friends and PhD colleagues in RMIT, Ayu Laksmi, Dian Tauriana, Dharma
Aryani, Erni Yuliawati, Susanti Rachman, Darius Antoni, Arie Wardhono, K. Bayu Sangka,
and Rabin Ibnu Zainal for a most enjoyable experience during my study. I will always cherish
our friendship during my stay in Melbourne.
Rindang Widuri
2014
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ABSTRACT
This study investigates the adoption and use of Generalized Audit Software (GAS) by
Indonesian audit firms. GAS is specialized software that enables the auditor to automate tasks
including client risk assessment. The researcher believed GAS use in Indonesia is not
widespread and one explanation for this is the absence of professionally qualified accountants
(ADB, 2003) and the World Bank (2011) reported that audit practices in Indonesia face a
quality related problem especially in mid-tier and small-sized firms. Audit firms began using
IT, including GAS (Braun and Davis, 2003, Coderre, 1996, Debreceny et al., 2005, Lovata,
1990, Junaid, 2005, Alles et al., 2002), during the 1980s to improve effectiveness and
efficiency (Fischer, 1996). However, previous studies (Janvrin et al., 2008b, Debreceny et al.,
2005) indicate that external auditors used applications infrequently and instead, were likely to
depend on unsophisticated analytical review procedures (Fischer, 1996). Traditional
analytical review procedures, such as ratio analysis, have limited ability to detect fraud
(Hogan et al., 2008) and without rigorous processes, many professionals believe that
stakeholders are not adequately informed and therefore the quality of auditing is
questionable. Most studies into audit technology or audit software have focused on the largest
firms in developed economies (Bedard et al., 2003, Curtis and Payne, 2008, Vendrzyk and
Bagranoff, 2003). Studies in developed economies indicate that audit software has been
adopted extensively by Big four firms (Janvrin et al., 2008a).
The results of this study are based on semi-structured in-depth interviews with 27 external
auditors from firms of all sizes, a senior member of a professional body, and 6 staff from 2
