The digital transformation of external audit and its impact on corporate governance

Riadh Manita, Najoua Elommal, Patricia Baudier () and Lubica Hikkerova
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Riadh Manita: NEOMA - Neoma Business School
Najoua Elommal: EMLV - École de management Léonard de Vinci
Patricia Baudier: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Lubica Hikkerova: IPAG Business School

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Abstract: The literature demonstrates the growing interest of digitalization in organizations. The purpose of this paper is to study the influence of digitalization on audit's business and to understand how it can improve the role of audit as a governance mechanism. A qualitative approach was conducted by interviewing auditors from the five largest auditing firms in France. This paper demonstrates that digital technology is impacting at five key levels audit firms especially the audit role as a governance mechanism. Digitalization will improve the audit relevance (1) allowing audit firms to extend their offers by proposing new services (2). It will also improve the audit quality mainly by analysing all data's customer (3). Finally, with the digitalization a new auditor profile emerges (4), enabling the culture of innovation within audit firms (5). Thus, the firm governance will be improved but the managers ‘discretionary power will be limited. This research highlights the importance of implementing digital strategies to provide regulators with the necessary modifications that need to occur for audit standards. It should enable Business School and universities to adapt their training programs according to the audit firms' expectations.

Keywords: Audit; Digitalization; Big Data; Artificial Intelligence; Audit process (search for similar items in EconPapers)
Date: 2020-01
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Citations: View citations in EconPapers (27)

Published in Technological Forecasting and Social Change, 2020, 150, pp.119751. ⟨10.1016/j.techfore.2019.119751⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04314467

DOI: 10.1016/j.techfore.2019.119751

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