The effect of audit digital transformation on audit quality: evidence from digital bank confirmations
Digital transformation is pivotal to the high-quality development of the audit profession in China. This paper examines the impact of digital bank confirmations on audit quality as part of this transformation. We find that digital bank confirmations significantly improve cash flow audit quality. The...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2024-12-01
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| Series: | China Journal of Accounting Studies |
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| Online Access: | https://www.tandfonline.com/doi/10.1080/21697213.2024.2442769 |
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| author | Rui Guo Yuanyuan Jia Lirong Shentu |
| author_facet | Rui Guo Yuanyuan Jia Lirong Shentu |
| author_sort | Rui Guo |
| collection | DOAJ |
| description | Digital transformation is pivotal to the high-quality development of the audit profession in China. This paper examines the impact of digital bank confirmations on audit quality as part of this transformation. We find that digital bank confirmations significantly improve cash flow audit quality. The effect is particularly pronounced when auditors assess a higher risk of material misstatement, possess greater industry expertise, or face heavier workloads. Further analysis reveals that digital confirmations improve the persistence of cash flow components of earnings and mitigate the cash flow anomaly, thereby enhancing market pricing efficiency. Additionally, digital bank confirmations may have spillover effects on other high-risk audit items. This study provides empirical evidence on the economic consequences of the digital transformation in auditing and contributes to the literature on audit quality and its influencing factors. The findings provide valuable insights for the implementation of digital bank confirmations in future audit practices. |
| format | Article |
| id | doaj-art-afdd19b2aaea4c41acba040d82325722 |
| institution | OA Journals |
| issn | 2169-7213 2169-7221 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | China Journal of Accounting Studies |
| spelling | doaj-art-afdd19b2aaea4c41acba040d823257222025-08-20T02:00:02ZengTaylor & Francis GroupChina Journal of Accounting Studies2169-72132169-72212024-12-0113510.1080/21697213.2024.2442769The effect of audit digital transformation on audit quality: evidence from digital bank confirmationsRui Guo0Yuanyuan Jia1Lirong Shentu2Accounting Department, School of Management, Xiamen University, Xiamen, Fujian, ChinaSchool of Accounting, Dongbei University of Finance and Economics, Dalian, Liaoning, ChinaAccounting Department, School of Management, Xiamen University, Xiamen, Fujian, ChinaDigital transformation is pivotal to the high-quality development of the audit profession in China. This paper examines the impact of digital bank confirmations on audit quality as part of this transformation. We find that digital bank confirmations significantly improve cash flow audit quality. The effect is particularly pronounced when auditors assess a higher risk of material misstatement, possess greater industry expertise, or face heavier workloads. Further analysis reveals that digital confirmations improve the persistence of cash flow components of earnings and mitigate the cash flow anomaly, thereby enhancing market pricing efficiency. Additionally, digital bank confirmations may have spillover effects on other high-risk audit items. This study provides empirical evidence on the economic consequences of the digital transformation in auditing and contributes to the literature on audit quality and its influencing factors. The findings provide valuable insights for the implementation of digital bank confirmations in future audit practices.https://www.tandfonline.com/doi/10.1080/21697213.2024.2442769Digital transformation of auditingdigital bank confirmationaudit qualityBlockchain Platform of Bank Confirmation |
| spellingShingle | Rui Guo Yuanyuan Jia Lirong Shentu The effect of audit digital transformation on audit quality: evidence from digital bank confirmations China Journal of Accounting Studies Digital transformation of auditing digital bank confirmation audit quality Blockchain Platform of Bank Confirmation |
| title | The effect of audit digital transformation on audit quality: evidence from digital bank confirmations |
| title_full | The effect of audit digital transformation on audit quality: evidence from digital bank confirmations |
| title_fullStr | The effect of audit digital transformation on audit quality: evidence from digital bank confirmations |
| title_full_unstemmed | The effect of audit digital transformation on audit quality: evidence from digital bank confirmations |
| title_short | The effect of audit digital transformation on audit quality: evidence from digital bank confirmations |
| title_sort | effect of audit digital transformation on audit quality evidence from digital bank confirmations |
| topic | Digital transformation of auditing digital bank confirmation audit quality Blockchain Platform of Bank Confirmation |
| url | https://www.tandfonline.com/doi/10.1080/21697213.2024.2442769 |
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