This study examines the future impact of digitalization on auditing by synthesizing empirical studies, relating them to surveys conducted by accounting bodies, and analyzing these findings in relation to extant literature. Based on the synthesis, this study proposes a transitional framework to enable the audit profession to remain competitive. The results show that digitalization may significantly affect the audit profession in the future. However, the impact is likely to be incremental rather than radical. To remain competitive, the audit profession needs to adopt new metrics, capabilities, skills, and evolve its business models to incorporate digital technologies. The contribution of this study is multifaceted. The propositions and research agenda presented in this study will be beneficial to academics, practitioners, audit regulators, and the general public as they have the potential to form a foundation for addressing future research questions and for the theorization and empirical testing of audit digitalization. [ABSTRACT FROM AUTHOR]

This study examines how a paradigm shift from traditional to digital audits could affect the audit expectation gap. It uncovers possible new areas of the expectation gap and threats and challenges resulting from this paradigm shift. The findings suggest that audit digitalization will result in the audit profession transitioning from the defensive approach of educating users on auditors’ duties to a constructive approach of using digital tools to perform some of the duties that users expect of auditors. Specifically, digital technologies have the potential to enhance internal controls and facilitate fraud prevention and detection, thus narrowing the expectation gap in relation to these critical issues. It may further accelerate the elimination of future challenges and threats and the narrowing of future expectation gaps. The potential benefits of switching to the constructive approach are lower costs for audit firms, enhanced audit quality, and improved client perceptions of auditors. 

Purpose– This study examines whether digital streaming and observation technologies can serve as analternative approach for collecting inventory audit evidence, the challenges faced in their adoption and thefactors contributing to their non-adoption.Design/methodology/approach– This study adopts a two-stage, mixed-method approach, beginning with pilotstudy interviews that informed the comprehensive survey with qualitative and quantitative data. Quantitativedata were analyzed using descriptive statistics, t-tests and Pearson’s correlation coefficient, while qualitativedata were analyzed using qualitative content analysis.Findings– Our findings revealed a positive perspective concerning the effectiveness and reliability of thesetechnologies for inventory audits and the efficiency of internal controls within them, despite challenges such asobtaining a holistic view of the warehouse, observing obsolescence, ensuring inventory completeness andgeneral reliability concerns. Additionally, preferences for physical inventory audits and skepticism about thesetechnologies’ potential to enhance audit quality were identified as factors contributing to their non-adoption.Research limitations/implications– These findings have important implications for cost-conscious firmsbecause they reveal that carefully adopting intermediate technologies can enhance the audit process.Our findings are relevant to audit regulators and firms interested in determining whether such technologiesenhance audit efficiency and quality. This study highlights the need for updated auditing standards and directivesand technologies that meet auditing requirements.Originality/value– This study contributes to the literature by uncovering whether less advanced technologiescan be used as an alternative approach to collect audit evidence. Consequently, the finding adds to the growingbody of literature underscoring the potential of technologies, even less sophisticated ones, to enhance theefficiency and effectiveness of audits, despite their challenges. Additionally, it underscores the need for clearregulatory standards, suggests that auditors embrace emerging technologies and acquire relevant skills andoffers insights for technology developers on audit firms’ concerns regarding digital technologies.