Unleashing the beast: the impact of big data and data analytics on the auditing profession—Evidence from a developing country

Abstract

Abstract This study attempts to obtain an understanding of the impact of adopting big data and data analytics (BD&A) on various dimensions of the audit profession. This study aims to examine the effect of adopting BD&A on the audit process, auditor competence, and audit fees in a developing context, Egypt. It also examines the mediating effect of auditor competence on the association between BD&A, audit process, and audit fees. A questionnaire was developed and distributed among financial auditors, IT/IS auditors, and data analytics specialists working for audit firms with different sizes in Egypt. Responses from 205 audit practitioners were collected. Partial least square structural equation modeling was employed to test the research hypotheses. It was revealed that BD&A has a significant positive impact on the audit process and auditor competence. However, an insignificant association between BD&A and audit fees was found. Also, the results indicated that there is a positive significant relationship between auditor competence and audit process, and between auditor competence and audit fees. The mediation analysis reveals that auditor competence partially mediates the relationship between BD&A and the audit process. This indicates that while BD&A directly enhances the audit process, its full potential is realized when auditors possess advanced competencies. In contrast, the relationship between BD&A and audit fees is fully mediated by auditor competence, reflecting the critical role of skill development in justifying fee adjustments.