Navigating the Digital Landscape: Unraveling Technological, Organizational, and Environmental Factors Affecting Digital Auditing Readiness in the Malaysian Public Sector

Abstract

ABSTRACT The tremendous development of IT requires auditors to be equipped with IT knowledge and tools to navigate the rapid development of e-government in public sectors, supporting the nation’s transformation agenda. However, the audit technology used by public sector auditors remains underutilized. This study examines Malaysian public sector internal auditors’ readiness for digital auditing. Questionnaires were distributed to 149 internal auditors, and the data were analyzed using PLS-SEM. Findings revealed that only technological and environmental factors were found to have a significant influence on the readiness of internal auditors to utilize digital auditing in their jobs, whereas organizational factors had no significant influence. The findings are anticipated to enrich the body of knowledge on the readiness of Malaysian public sector internal auditors to embrace digitalization as part of their routine. Understanding determinants is crucial for authorities to ensure digital economy players, including public sector internal auditors, are technology-ready for digital competencies. JEL Classifications: M42; M48.