INTERNAL AUDITORS’ ARTIFICIAL INTELLIGENCE CAPABILITIES AND SUSTAINABLE COMPETITIVE ADVANTAGE

Abstract

The aim of this research is to provide empirical evidence regarding the influence of internal auditor capabilities in artificial intelligence on sustainable competitive advantage in large companies in Indonesia. By using Porter’s (1985) competitive advantage model and the resource-based view of the firm, this research uses the basic assumption of thinking that a company can only achieve sustainable high performance if the company has “superior resources” and also has “capabilities” that can drive the company to improve its performance. This research finds empirical evidence that internal auditors’ ability to work with artificial intelligence can increase sustainable industrial competitive advantage. This finding also succeeded in confirming the theory of competitive advantage introduced by Porter (1985) which explains that a company’s human resource capabilities can improve the company’s performance higher than other companies in the same industry or market. This research contributes that as an assurance of corporate governance, accountants must improve their ability to work using artificial intelligence to improve their functions beyond just preparing financial reports.