Digitalization of External Audit and Its Impact on Corporate Governance: A Case of the Big Four Firms of Bangladesh

Abstract

Digitalization is increasingly transforming organizational functions, including
audit practices, by enhancing efficiency and data-driven insights. This study
examines how digitalization affects external audit practices within Bangladesh's
Big Four firms and evaluates its influence on corporate governance
effectiveness. Unique to this research is its focus on a developing economy,
providing insights into how digital tools are shaping audit processes and
governance standards in Bangladesh. A quantitative methodology, involving a
survey administered over auditors in leading firms, was employed to gather indepth perspectives. Findings reveal that digitalization enhances audit quality and
relevance, broadens audit service offerings, promotes data-centric decisionmaking, and fosters a culture of innovation, ultimately improving governance
mechanisms while curbing managerial discretion. The study recommends that
audit firms integrate digital strategies aligned with evolving audit standards and
regulatory expectations. However, a primary limitation is the study's focus on
large firms, which may limit applicability to smaller audit entities. Practically,
this research encourages audit firms to adopt digital tools for better service
delivery, while theoretically, it expands understanding of digital governance
impacts. Socially and managerially, it calls for skill adaptation among auditors,
while policy-wise it emphasizes revising audit standards to accommodate digital
progress.