Assessing the Readiness of Ethiopian Audit Firms for Digital Transformation
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Date
2026-11-03
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Addis Ababa University
Abstract
Digital transformation is transforming the audit profession globally, forcing audit firms to adapt new technology in order to raise audit quality and efficiency. Ethiopian audit firms’ readiness
towards digital transformation has not yet adequately identified. This study examined digital transformation readiness of Ethiopian audit firms based on the effect of awareness & strategic
understanding, adoption of technology, human capital development, risk management & audit quality, regulatory environment and client expectation. The research employed a cross-sectional
descriptive and explanatory mixed methods approach. Data was gathered from 122 licensed auditors of Addis Ababa through a questionnaire and analyzed using descriptive statistics,
correlation and multiple linear regressions. The finding shows that Ethiopian audit firms have a high to moderate digital readiness (Mean=3.76, SD=0.56). Regression model results proved to be
statistically significant (R²=0.73, p<0.001) with 73 percent of variation in the digital readiness being explained by the 6 independent variables; and awareness & strategic understanding have a
greater influence while regulatory environment is the weakest predictor; which emphasizes the institutional support. It is concluded that increasing the level of digital awareness, developing and increasing technology adoption capability, providing on-going training and updating the regulatory framework is significant to expedite digital transformation of Ethiopian audit firms.
The findings have implications for audit firms, regulators and policy makers, and add on to literature on digital transformation in audit profession of developing economies.
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: Digital readiness, audit firms, digital transformation, technology adoption