Determinants of audit quality in small and medium-sized enterprises adopting digital accounting systems: evidence from Jordan

Ahmad Farhan Alshira'h and Malek Alshirah

Asian Review of Accounting, 2025, vol. 34, issue 4, 837-858

Abstract: PurposeThis research aims to investigate the impact of both organizational and institutional elements – namely relative advantage, compatibility, top management support, organizational readiness and government support – on the quality of audits within Jordanian entities that are adopting digital accounting frameworks.Design/methodology/approachData were gathered from 454 auditing firms, with 365 valid responses subjected to analysis through partial least squares structural equation modeling (PLS-SEM) in order to evaluate the proposed relationships.FindingsAll suggested correlations were statistically significant. Relative advantage had the greatest impact, followed by compatibility, organizational preparedness, top management support and government assistance, highlighting the importance of both internal organizational dynamics and external institutional support in improving audit quality.Practical implicationsOrganizations ought to ensure the compatibility of their systems and the presence of managerial support, while policymakers should facilitate guidance and incentives.Social implicationsThe improvement of audit quality fosters increased transparency, accountability, stakeholder confidence and economic stability.Originality/valueTo the best of the author's knowledge, this research constitutes the inaugural study in Jordan, and specifically among small and medium-sized enterprises undergoing digital transformation in the aftermath of the COVID-19 pandemic, that explores the determinants of audit quality by integrating various theoretical frameworks – including innovation diffusion theory, contingency theory, agency theory, resource-based view and institutional theory. This is especially noteworthy considering that current literature has not adequately discussed auditing procedures in small and medium-sized businesses. The study fills a significant void and offers novel empirical insights into how organizational and institutional factors collectively influence audit quality in emerging economies, thereby providing valuable perspectives for both academics and practitioners navigating the digital transitions following the pandemic.

Keywords: Audit quality; Digital accounting systems; Technological factors; Organizational factors; Environmental factors; Jordanian SMEs (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-09-2025-0308

DOI: 10.1108/ARA-09-2025-0308

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