Exploring the Adoption of Audit Data Analytics Among External Auditors in Malaysia

Abstract

This study examines the current adoption of Audit Data Analytics (ADA) among external auditors in Malaysia and explores their perceptions regarding adoption plans, perceived opportunities, and challenges associated with ADA implementation. While ADA has the potential to transform traditional audit practices, its adoption remains inconsistent across audit firms, raising concerns about readiness and perceived benefits. A quantitative survey methodology was adopted, using a structured questionnaire distributed to external auditors from audit firms in Klang Valley, Penang, and Johor. A total of 221 responses were collected and analysed using descriptive statistics and reliability assessments via SPSS. The findings reveal that while many firms recognize the benefits of ADA, such as improved audit quality and greater transaction testing capabilities, actual adoption levels vary significantly across audit areas. Key challenges identified include client concerns over data confidentiality, insufficient ADA expertise, and inadequate technological infrastructure. This study contributes to current literature by providing empirical insights into ADA adoption within Malaysia’s external auditing sector, an area previously underexplored. The findings offer practical implications for audit firms, regulators, and professional bodies seeking to promote ADA adoption and advance digital transformation in the auditing profession.