What are the Factors that Influence the Adoption of Data Analytics and Artificial Intelligence in Auditing?

Although past research finds that auditors support data analytics and artificial intelligence to enhance audit quality in their daily work, in reality, only a small number of audit firms, who innovated and invested in the two sophisticated technologies, utilize it in their auditing process. This paper analyzes three factors, including three individual theories, that may influence the adoption of data analytics and artificial intelligence in auditing: regulation (Institutional theory: explaining the catch-22 between the auditors and policymakers), knowledge barrier (Technology acceptance model\u27s theory: explore the concept of ease of use), and people (algorithm aversion: a phenomenon that auditors believe in human decision makers more than technology). Among the three barriers, this paper focuses more on the people factor, which firms can start to overcome early. Past research has shown the existence of algorithm aversion in audit, so it is important to identify ways to decrease algorithm aversion. This study conducted a survey with four attributes: transparency-efficiency-trade-off, positive exposure, imperfect algorithm, and company\u27s training. The study results shows that transparency-efficiency-trade-off can be a potential solution for decreasing algorithm aversion. When auditor firms implement transparency-efficiency-trade-off in their company training, auditors may give more trust to the technologies. The trust may lead to the increase of data analytics and artificial intelligence in audit