Audit Report Lag Responsiveness of Text Data Analytics: Time-Saving or Time-Demanding? Evidence from Nigeria

Abstract

In response to concerns about existential threat of the audit profession that followed the emergence of artificial intelligence (AI), the current study was undertaken to investigate the potential complementary role of the technology in solidifying the profession through its deployability on text data analytics. Against this backdrop, the study investigated the impact of text data analytics on audit report lag of listed manufacturing firms in Nigeria. A mixed method design was implemented wherein primary data were sourced from the external auditors at firm-level to measure text data analytics, while secondary data were collected from the audited annual reports of the manufacturing firms. Following analyses, it was found that text data analytics associated positively with audit report lag elongation. Consequently, it was conclusive that text data analytics has the potential to contribute to audit quality through enablement of professional skepticism. It was therefore recommended, among others, that regulatory bodies such as Financial Reporting Council of Nigeria should promote the use of text data analytics in auditing through guidelines, standards, or incentives