The effects of person‐specific, task, and environmental factors on digital transformation and innovation in auditing: A review of the literature

Abstract

AbstractThis study reviews literature examining digital transformation in the external audit setting. Our review will inform the standard‐setting initiatives of the International Auditing and Assurance Standards Board (IAASB) related to the use of technology in auditing. We identified 36 articles on digital transformation in the external audit published between 2000 and 2021 across 20 journals ranked A*, A, B, and C on the Australian Business Deans Council (ABDC) 2021 Journal Quality List. We also identified 18 advanced working papers. These articles cover conceptual frameworks and archival, experimental, interviews, case studies, and survey research methods. Fifty percent of the published articles appear in A* or A journals, of which nine were published in one of the premier six accounting research journals (i.e., A*) since 2020. This trend is a promising sign that there appears to be increasing interest in publishing digital transformation‐related research in these general interest journals. We use the Bonner judgment and decision‐making framework, coupled with the four primary data analytic tools, to organize and evaluate the literature. This study examines descriptive and diagnostic analytics; more complex techniques, such as predictive and prescriptive, are not as prevalent. Further, existing research insufficiently addresses how data analytic tools impact auditor judgment and decision‐making, providing multiple future inquiry lines.