The Digital Transformation of Auditing: Navigating New Frontiers
Sung Hwan Chai, Brian Nicholson and George Salijeni (2022) Understanding the Effect of Digitalisation on Auditors, British Academy of Management conference
In the wake of the global pandemic, the auditing profession, like many others, found itself at a crossroads of rapid digital transformation. The need for remote work and social distancing accelerated the adoption of digital tools reshaping the landscape of audit practices. This blog delves into the profound impact of digitalisation on auditors, highlighting the challenges and opportunities it presents in the realms of platformisation, virtualisation, surveillance, and the blurring of professional boundaries.
Platformisation and Virtualisation: The New Norms
Digitalisation introduces two pivotal concepts in auditing: platformisation and virtualisation. Platformisation reflects the adoption of digital platforms where auditors can share, innovate, and collaborate, much like a communal digital workspace. Meanwhile, virtualisation encapsulates the transition to remote work setups and virtual audit rooms, altering traditional auditor-client interactions and internal team dynamics.
Navigating the Digital Terrain
The shift to digital has fundamentally transformed auditors' day-to-day operations. The reliance on digital platforms necessitates a new set of skills, emphasizing the importance of digital literacy in the auditing profession. However, this transformation extends beyond just operational changes; it also influences auditors' work culture and professional interactions.
The Surveillance Conundrum
With digital platforms comes an enhanced capacity for surveillance—both panoptic (from management) and synoptic (between peers). Auditors find themselves in a new realm of visibility, where their contributions, activities, and even work hours are constantly monitored. This culture of surveillance fosters a need for auditors to maintain a visible presence on these platforms, subtly influencing their work habits and potentially leading to longer hours under the guise of flexibility and dedication.
The Liquid Modernity of Auditing
Drawing on Zygmunt Bauman's concept of liquid modernity, the auditing profession appears to be transitioning towards a more fluid state, where traditional boundaries and structures are increasingly blurred. This fluidity offers opportunities for innovation but also presents challenges in maintaining professional integrity and identity amidst the evolving digital landscape.
Embracing the Change, Mindfully
As the auditing profession continues to evolve in the face of digitalisation, it's crucial for auditors and audit firms to navigate this new landscape thoughtfully. The potential of digital tools to enhance efficiency and innovation is immense, but it's equally important to be aware of the challenges they present, particularly in terms of surveillance, work-life balance, and the shifting nature of professional roles.
In conclusion, the digital transformation in auditing is a double-edged sword. While it propels the profession into new frontiers of efficiency and collaboration, it also brings to light issues of surveillance, work culture, and professional identity. As auditors and firms adapt to this new digital era, striking a balance between leveraging technology and preserving the core values of the profession will be key. The future of auditing is undoubtedly digital, but it's the human response to these digital changes that will define its trajectory.