Journal of Information Systems· 2026Q1
Automation and the Reallocation of Assurance Resources: Evidence from Board Members, Executives, and Internal Auditors
- 4citations
- Q1SCImago
- 2026year
Short summary
Companies respond to internal audit automation efficiencies by cutting the budget for assurance activities while maintaining consulting services, redirecting gains away from core audit tasks.
AI-generated from the title and abstract; the full text is not read.
Key points
- Automation efficiencies in internal audit lead to a decrease in the total IAF budget.
- Budget cuts are specifically directed at assurance activities, not consulting activities.
- Board members, executives, and internal auditors all recommended these budget reallocations.
- Participants anticipate positive impacts from further automation.
AI-generated from the title and abstract; the full text is not read.
Abstract
ABSTRACT Technological advances that automate work continue to transform the accounting profession. We examine whether automation impacts resource allocation within the internal audit function (IAF), a unique setting that allows us to compare demand for assurance activities and consulting activities. We conduct an experiment in which experienced board members, executives, and internal auditors make budget recommendations for a company’s IAF that developed automations that improved the efficiency of the IAF. Results show that across all groups, participants respond to these efficiencies by decreasing the IAF’s total budget but retaining the productive capacity of the IAF. The budget cuts are targeted at the IAF’s assurance activities and not at its consulting activities. Moreover, participants across all groups endorse further automation, anticipating its positive impact on the IAF. Overall, our results suggest companies respond to automation by redirecting efficiency gains toward activities other than assurance activities. Data Availability: Please contact the authors.
The authors' abstract, as published at the source. Journal of Information Systems, 2026 · DOI ↗
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Management Information SystemsBusiness, Management and Accounting