Designing and Explaining a Context-Specific Model for Implementing Emerging Digital Technologies in Auditing: A Grounded Theory Approach

Abstract

This study aimed to design and explain a context-specific model for implementing emerging digital technologies in Iranian audit firms by identifying its causal, contextual, and intervening conditions, strategies, and consequences. This applied-developmental qualitative study was conducted in 2025 using the structured grounded theory approach proposed by Strauss and Corbin. The participants were 12 academic experts and experienced audit-firm partners with expertise in auditing and digital technologies, selected initially through purposive sampling and subsequently through theoretical sampling. Data were collected through in-depth, semi-structured interviews, which continued until theoretical saturation was achieved. The interview data were analyzed through open, axial, and selective coding and the constant comparative method. Analytical memoing, peer review, participant checking, repeated revision of the categories, and examination of coding agreement were employed to enhance the credibility, dependability, and confirmability of the findings. The analysis generated a paradigmatic model comprising six interconnected components. The central phenomenon was the adoption and implementation of artificial intelligence, big-data analytics, blockchain, and robotic process automation in auditing. Environmental technological pressures, the rapid expansion of financial and nonfinancial data, increasing stakeholder expectations, and the limitations of conventional audit procedures emerged as causal conditions. The institutional structure of the profession, inadequate digital infrastructure, fragmented information systems, and restricted access to organizational and governmental databases constituted the contextual conditions. Conservative organizational cultures, managers’ attitudes and age, financial and regulatory constraints, international sanctions, cybersecurity threats, and privacy concerns operated as intervening conditions. The principal strategies included developing domestic audit software, progressively strengthening digital competencies, recruiting interdisciplinary specialists, integrating databases, redesigning audit procedures, and renewing audit firms’ business models. Implementing these strategies was associated with greater audit quality and efficiency, more comprehensive transaction testing, improved anomaly detection, expansion of data-driven advisory services, and restructuring of the audit workforce. Conversely, delayed or unequal adoption could widen the competitive and technological gap between audit firms. Digital transformation in auditing is a context-dependent, multidimensional, and nonlinear process rather than a purely technical transition. Its successful implementation in Iran requires a phased indigenous framework, coordinated institutional support, secure data governance, sustained investment in human capital, and integration of technological capabilities with auditors’ ethical and professional judgment.