Big Tech, Cloud Computing, and Accounting

54 Pages Posted: 4 Jun 2020 Last revised: 5 Jan 2021

See all articles by Jordan Schoenfeld

Jordan Schoenfeld

Dartmouth College - Tuck School of Business

Date Written: January 1, 2021


Modern firms routinely store and process their financial accounting data using cloud computing and other third-party enterprise technologies. This practice puts the integrity of the financial statements at risk, and accounting standard setters provide guidance for a special type of audit that evaluates this risk. This study provides some of the first large-sample evidence that quantifies the market for these audits. Using hand-collected data from public companies, I find that 29 percent of firms in the S&P 500 receive these audits. I also find that a firm's business-model exposure to providing technology services is predictive of its decision to receive these audits, and the scope of these audits includes customer-relevant internal controls over data security and processing integrity. These audits are also associated with a large increase in audit-related fees that is highly economically significant. These findings highlight the economic significance of non-financial audits in our attempts to understand the audit fee environment, and support theory that predicts that financial statement audits may not meet the needs of all stakeholders.

Keywords: Audit; big data; corporate governance; internal control; technology

JEL Classification: M40, M49, O33

Suggested Citation

Schoenfeld, Jordan, Big Tech, Cloud Computing, and Accounting (January 1, 2021). Tuck School of Business Working Paper No. 3596065, Available at SSRN: or

Jordan Schoenfeld (Contact Author)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics