Technical Reserves Audit Challenges and Opportunities with the Emergence of ERP: Investigating Egyptian Auditors Perceptions

Abstract

This study examines the perceptions of external auditors operating in Egypt regarding technical reserves audit challenges and opportunities with the emergence of Enterprise Resource Planning (ERP). All audit firms that are specialized in reviewing insurance companies’ financial statements and are working in Egypt were surveyed to ascertain if there is a notable discrepancy in auditors' perceptions of challenges and opportunities of technical reserves audit with the emergence of ERP. The final sample consists of 126 auditors who work in Big 4 auditing firms, and non-Big 4 auditing firms. Through hypotheses testing the main findings reveal that the auditors' perceptions differ significantly from one another regarding challenges and risks encountering them in auditing the general insurance companies and the impact of ERP systems on the producers they carry out. In addition, the abovementioned perception differences were explained thr ough engaging in auditors’ psychological counterpart (i.e., Gender, educational level, audit firm size and experience in auditing insurance companies) throughout the analysis. To the best of the authors’ knowledge, this is the first study to investigate the auditors’ perception regarding the technical reserve audit while using an ERP in emerging markets. Hence, the current study touches a blind spot in literature as the current investigation and results bring new evidence regarding technical reserve audit which enrich the ongoing debate on technical reserves audit and the challenges and opportunities related to the increased use of software packages like the ERP.