Prepare for Takeoff: Improving Asset Measurement and Audit Quality with Drone-Enabled Inventory Audit Procedures

35 Pages Posted: 7 Mar 2019 Last revised: 20 Aug 2019

See all articles by Margaret H. Christ

Margaret H. Christ

University of Georgia - Terry College of Business

Scott A. Emett

Arizona State University (ASU) - School of Accountancy

Scott L. Summers

Brigham Young University - School of Accountancy

David A. Wood

Brigham Young University - School of Accountancy

Date Written: August 20, 2019

Abstract

Auditors increasingly employ technologies to improve audit quality. We examine whether using drones and automated counting software can improve audit quality and thereby improve asset measurement and financial reporting. We assess three dimensions of audit quality—efficiency, effectiveness, and quality of audit documentation. We provide evidence that auditors can perform inventory counts with these technologies 1,413 to 3,474 percent more efficiently than using manual techniques, while decreasing error rates by as much as 487 percent, and providing higher-quality audit documentation. Interviews with national-level partners and audit standard setters provide evidence that additional regulatory guidance in this domain would spur greater adoption of these technologies in audits.

Keywords: Drones, Automated Software, Inventory Counting, Inventory, Design Science

JEL Classification: M4, M40, M41, M42, M49, O30, O31

Suggested Citation

Christ, Margaret H. and Emett, Scott A. and Summers, Scott L. and Wood, David A., Prepare for Takeoff: Improving Asset Measurement and Audit Quality with Drone-Enabled Inventory Audit Procedures (August 20, 2019). Available at SSRN: https://ssrn.com/abstract=3335204 or http://dx.doi.org/10.2139/ssrn.3335204

Margaret H. Christ

University of Georgia - Terry College of Business ( email )

Athens, GA 30602-6254
United States
706-542-3602 (Phone)

Scott A. Emett

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

Scott L. Summers

Brigham Young University - School of Accountancy ( email )

516 TNRB
Provo, UT 84602
United States
801-422-9790 (Phone)
801-422-0621 (Fax)

David A. Wood (Contact Author)

Brigham Young University - School of Accountancy ( email )

518 TNRB
Brigham Young University
Provo, UT 84602
United States
801-422-8642 (Phone)
801-422-0621 (Fax)

HOME PAGE: http://marriottschool.byu.edu/employee/employee.cfm?emp=daw44

Register to save articles to
your library

Register

Paper statistics

Downloads
122
Abstract Views
775
rank
230,356
PlumX Metrics