Digital Transformation and Its Impact on Audit Efficiency: The Moderating Role of Auditing Firm Size — An Empirical Evidence from Companies listed in the Egyptian Stock Exchange

This study investigates the impact of digital transformation, driven by information and communication technology (ICT), on audit efficiency in companies listed on the Egyptian Stock Exchange. It analyses the annual reports of 40 companies from the EGX30 index over the period 2018–2024. The research utilizes content analysis to evaluate the level of digital transformation using an index composed of six key components: Digital capabilities (DC), digital technology applications (DTA), artificial intelligence (AI), big data technologies (BD), cloud computing (CC), and blockchain (BC). Audit efficiency is assessed through the primary indicator: audit report lag.
The study finds that Big 4 audit firms significantly enhance audit efficiency by reducing audit delay. While digital transformation alone does not significantly improve audit efficiency, its positive impact is diminished when Big 4 auditors are involved. Additionally, stronger corporate governance, such as larger boards and more independent directors, contributes to higher audit efficiency.
These insights are valuable for auditors, regulators, and companies looking to leverage digital transformation to boost audit efficiency. This research is limited prior studies that examine the impacts of the digital transformation on audit efficiency, particularly within the context of Egyptian companies. It contributes to the existing literature on the determinants of digital transformation in annual reporting and can inform future studies and research.