The Evolution of External Auditing: Challenges and Opportunities in a Digitalized Financial Environment
Keywords:
External Auditing, Digital Transformation, Audit Quality, Audit Efficiency, Cybersecurity, Financial TransparencyAbstract
The field of external auditing is undergoing a profound transformation driven by the rapid advancement of digital technologies. This systematic literature review (SLR) examines the evolution of external auditing in the context of a digitalized financial environment, focusing on the challenges and opportunities presented by emerging technologies such as Artificial Intelligence (AI), blockchain, data analytics, and FinTech. The study synthesizes findings from 15 peer-reviewed journals to explore how digital tools are reshaping auditing practices, enhancing audit quality, efficiency, and transparency, while also presenting significant challenges related to skill development, organizational readiness, and data security. The review highlights the key benefits of digitalization in external auditing, including improved accuracy, real-time data analysis, and enhanced fraud detection capabilities. However, it also identifies the barriers auditors face in adapting to these technological advancements, such as the need for new competencies, potential cybersecurity risks, and concerns regarding the ethical implications of automating auditing functions. Moreover, the study underscores the need for auditors to embrace continuous learning and technological adaptation in order to remain relevant in an increasingly digitalized audit environment. The findings suggest that while the digital transformation of auditing presents numerous opportunities, it also necessitates significant changes in auditor education, organizational strategies, and regulatory frameworks. This review contributes to a deeper understanding of how digitalization is shaping the future of external auditing and offers practical recommendations for auditors and firms navigating this evolving landscape.
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