Emerging Technologies in External Audit and How They Are Challenging Auditors' Judgements and Decision‐Making Processes

ABSTRACT This study investigates how external auditors use heuristics to resolve complex audit matters when using audit data analytics (ADA). The use of ADA technologies, tools, and applications has led to the emergence of many challenges for the auditing profession, including those related to cognitive heuristics and auditor skills. Verbal protocol analysis and follow‐up interviews with the same 20 participants are methods used to collect data for this exploratory study. Our findings revealed that being overly reliant on easily obtainable information produced from ADA technologies can result in a loss of audit objectivity. The potential consequences include a decline in the quality of an external auditor's assessments and a potential decrease in the overall efficacy of the audit. We report the tendency of auditors to rely on the recollection heuristic, while utilising ADA technologies can be mostly attributed to their limited understanding of these ADA technologies, tools, and applications. Our analysis of participants' responses indicates that, despite the potential advantages of ADA, they preferred simpler programs like Microsoft Excel.