Shift to Digital Audit: A Study Investigating the Benefits and Challenges of Digitalization on the Audit Profession

Angeles, Earl Jed A. Angeles; Mabazza, Godfrey B. Mabazza; Pascua, Angel Errine Grace B. Pascua; Salta, Krishabelle E. Salta; Santiago, Zedric Joel V. Santiago; Marquez, Jerome Marquez; Catacutan, Karen Joy

doi:10.55927/ajma.v2i4.6294

Cited by 3 publications

(4 citation statements)

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“…Regarding the definition of The Fourth Industrial Revolution (4IR) can be considered, according to analysis of pervious literature (Lin et al, 2018;Babayeva and Manousaridis, 2020;Manita et al, 2020;Tavares et al, 2022;Hamid et al, 2022) as a radical and structural change process through combination and integration of digital and electronic technologies tools into a current business model and society. This is what some pervious literature (Deloitte, 2018;Schmitz and Leoni, 2019;Ullrich et al, 2019;Khanom, 2020) have called what is known as the process of digital transformation of the auditing profession' clients.…”

Section: The Industry 40 From Perspective An Accounting Professionmentioning

confidence: 99%

“…With regard to the effects of the digital transformation, to the occurrence of the industrial (4.0), on audit quality according to the analysis the pervious literature, such as (Almaleeh, 2019;Manita et al, 2020;Babayeva and Manousaridis, 2020;Khanom, 2020), it includes many aspects, including; Increasing the accuracy of the professional judgments of auditors, taking into account the impact of the audit client's recognition of digital assets and cloud computing arrangements, as well as the mandatory disclosure of risks and cyber security risk management at the stages of the audit process.…”

Section: The Effects Of the Industry 40 On The Auditing Professionmentioning

confidence: 99%

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The Effect of the fourth The Effect of the fourth industrial revolution from the perspective of the auditing Profession

Nasr Ali

2024

Alexandria Journal of Managerial Research and Information Syste

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Section: The Industry 40 From Perspective An Accounting Professionmentioning

confidence: 99%

Section: The Effects Of the Industry 40 On The Auditing Professionmentioning

confidence: 99%

The Effect of the fourth The Effect of the fourth industrial revolution from the perspective of the auditing Profession

Nasr Ali

2024

Alexandria Journal of Managerial Research and Information Syste

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“…Auditing aims to carry its duties out effectively, correctly, and in accordance with established standards (Babayeva & Manousaridis, 2020). Examining the fairness and accuracy of the company's statements should give the auditor a sense of the overall outlook of the financial statements.…”

Section: Introductionmentioning

confidence: 99%

The Implications of Ownership Structure and Audit Quality on Financial Reporting Quality: Evidence from Egypt

Abdelmoneim

2024

MSA-Management Sciences Journal

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Financial reporting reliability and accuracy are very crucial to evaluating the management's stewardship and making wise financial decisions, high audit quality supports the financial reporting quality (FRQ) and is an indicator of its accuracy. The ownership structure plays an important role in firm performance, offers regulators insights into how to enhance corporate governance, and helps firms become more efficient. This study explains how the audit quality and ownership structure can enhance FRQ and depict the business's financial position. The research sample is 40 nonfinancial firms listed in the Egyptian stock market (EGX) from 2018 to the year 2022. Results find an insignificant relationship between audit quality and FRQ. Results find that blockholder ownership has a significant positive impact, managerial ownership has an insignificant impact, and institutional ownership has a significant negative impact on financial statement quality. The model finds that board size has a positive significant relationship and firm size has a negative significant relationship with FRQ. This study contributes to the corporate governance and financial reporting literature and enlightens policymakers on the current situation regarding audit quality and current business pressures for profit maximization.

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“…This strategy is put into action by strengthening its position among audit clients, adopting new technologies like artificial intelligence and offering audit services that are very smart and meet the high standards of clients (Bakarich and O'Brien, 2021;Kokina and Davenport, 2017). It aims to gain the satisfaction and trust of audit clients and to continue with them in order to reduce audit costs, increase audit efficiency in the short and long term (Babayeva and Manousaridis, 2020;Louwers et al, 2018;van Nieuw Amerongen et al, 2022) and reduce the expectation gap experienced by audit firms (Babayeva and Manousaridis, 2020;Munoko et al, 2020). In addition, the risks and costs of audit procedures are lower for existing clients compared to new clients, not to mention attracting new clients (Kumar and Sharma, 2015;Louwers et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

A deep learning-based SEM-ANN analysis of the impact of AI-based audit services on client trust

Rawashdeh

2023

JAAR

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PurposeThe advent of technology has propelled audit firms to incorporate AI-based audit services, bringing the relationship between audit clients and firms into sharper focus. Nonetheless, the understanding of how AI-based audit services affect this relationship remains sparse. This study strives to probe how an audit client's satisfaction with AI-based audit services influences their trust in audit firms. Identifying the variables affecting this trust, the research aspires to gain a deeper comprehension of the implications of AI-based audit services on the auditor-client relationship, ultimately aiming to boost client satisfaction and cultivate trust.Design/methodology/approachA conceptual framework has been devised, grounded in the client-company relationship model, to delineate the relationship between perceived quality, perceived value, attitude and satisfaction with AI-based audit services and their subsequent impact on trust in audit firms. The research entailed an empirical investigation employing Facebook ads, gathering 288 valid responses for evaluation. The structural equation method, utilized in conjunction with SPSS and Amos statistical applications, verified the reliability and overarching structure of the scales employed to measure these elements. A hybrid multi-analytical technique of structural equation modeling and artificial neural networks (SEM-ANN) was deployed to empirically validate the collated data.FindingsThe research unveiled a significant and positive relationship between perceived value and client satisfaction, trust and attitude towards AI-based audit services, along with the link between perceived quality and client satisfaction. The findings suggest that a favorable attitude and perceived quality of AI-based audit services could enhance satisfaction, subsequently augmenting perceived value and client trust. By focusing on the delivery of superior-quality services that fulfill clients' value expectations, firms may amplify client satisfaction and trust.Research limitations/implicationsFurther inquiries are required to appraise the influence of advanced technology adoption within audit firms on client trust-building mechanisms. Moreover, an understanding of why the impact of perceived quality on perceived value proves ineffectual in the context of audit client trust-building warrants further exploration. In interpreting the findings of this study, one should consider the inherent limitations of the empirical analysis, inclusive of the utilization of Facebook ads as a data-gathering tool.Practical implicationsThe research yielded insightful theoretical and practical implications that can bolster audit clients' trust in audit firms amid technological advancements within the audit landscape. The results imply that audit firms should contemplate implementing trust-building mechanisms by creating value and influencing clients' stance towards AI-based audit services to establish trust, particularly when vying with competing firms. As technological evolutions impinge on trustworthiness, audit firms must prioritize clients' perceived value and satisfaction.Originality/valueTo the researcher's best knowledge, no previous study has scrutinized the impact of satisfaction with AI-based audit services on cultivating audit client trust in audit firms, in contrast to past research that has focused on the auditors' trust in the audit client. To bridge these gaps, this study employs a comprehensive and integrative theoretical model.

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Shift to Digital Audit: A Study Investigating the Benefits and Challenges of Digitalization on the Audit Profession

Cited by 3 publications

References 44 publications

The Effect of the fourth The Effect of the fourth industrial revolution from the perspective of the auditing Profession

The Effect of the fourth The Effect of the fourth industrial revolution from the perspective of the auditing Profession

The Implications of Ownership Structure and Audit Quality on Financial Reporting Quality: Evidence from Egypt

A deep learning-based SEM-ANN analysis of the impact of AI-based audit services on client trust

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