As organizations increasingly rely on artificial intelligence (AI), big data analytics, blockchain, and automation, auditors are facing a new challenge. Traditional auditing methods, which primarily examine financial records through sampling techniques, are becoming insufficient for monitoring complex digital environments. Modern organizations now depend on software, automated decision-making systems, and interconnected digital platforms that require a different approach to assurance.
According to the researchers, auditing in the digital era must extend beyond checking financial outcomes. Auditors should also assess whether the systems and algorithms producing those outcomes operate accurately, transparently, consistently, and in accordance with governance standards. This shift represents a fundamental evolution in the accounting profession as businesses become increasingly data-driven.
Why Digital Auditing Matters
The rapid expansion of digital business ecosystems has transformed how financial information is generated and processed. Artificial intelligence can automatically classify transactions, blockchain can record financial activities without alteration, and robotic process automation can execute accounting tasks with minimal human intervention.
While these technologies improve efficiency, they also introduce new risks. Errors in algorithms, weak system controls, or poor data quality can affect financial reporting without being immediately visible through conventional audits.
The UNINDRA researchers argue that auditors must therefore evaluate not only financial outputs but also the technological infrastructure responsible for producing them. This broader perspective helps organizations maintain transparency, accountability, and public trust in increasingly automated business processes.
How the Study Was Conducted
The researchers employed a quantitative explanatory research design involving 120 respondents across Indonesia. Participants included:
- External auditors
- Internal auditors
- Information technology practitioners
Respondents were selected because they had at least two years of experience in auditing or information systems. Data were collected through structured online questionnaires using a five-point rating scale and analyzed with multiple linear regression to examine relationships among algorithm evaluation, system reliability, and audit quality. The study also tested whether system reliability acts as a mediating factor between algorithm evaluation and audit performance.
Key Findings
The study found several important results that reinforce the importance of digital auditing:
- Algorithm evaluation significantly improves audit quality.
- Reliable information systems strengthen the positive impact of algorithm evaluation.
- System reliability serves as a significant mediator between algorithm evaluation and audit quality.
- Technology-based audits detect anomalies faster and more comprehensively than traditional sampling-based audits.
- Auditors with stronger digital competencies achieve better audit effectiveness.
- The research model explains 62% of the variation in audit quality, indicating that algorithm evaluation and system reliability are major contributors to successful digital audits.
These findings suggest that successful auditing in the digital era depends not only on adopting advanced technologies but also on ensuring that those technologies operate within reliable and well-governed information systems.
Human Expertise Remains Essential
Although artificial intelligence and automated analytics enhance audit efficiency, the researchers emphasize that technology should complement—not replace—professional auditors.
Digital systems can process enormous volumes of transactions and identify unusual patterns much faster than manual methods. However, professional judgment remains indispensable when evaluating business context, determining materiality, interpreting risks, and making ethical decisions.
As Ana Rusmardiana and colleagues from Universitas Indraprasta PGRI explain, modern auditing should move "from examining financial outputs to assessing the design, control, and behavior of the systems that generate those outputs." This perspective positions algorithm evaluation as a core component of future audit frameworks rather than merely an additional technological tool.
Implications for Business, Regulators, and Education
The research offers practical recommendations for multiple stakeholders.
For businesses, investment in reliable information systems, transparent algorithms, and digital governance is becoming increasingly important to maintain high-quality internal and external audits.
For public accounting firms and internal audit departments, the findings highlight the need to strengthen auditors' digital competencies, including expertise in data analytics, artificial intelligence, and information systems.
For regulators and professional accounting associations, the study supports the development of clearer standards for auditing AI systems, algorithm transparency, digital controls, data governance, and technology-related risks.
Higher education institutions may also benefit by updating accounting and auditing curricula to include information systems, AI governance, cybersecurity, and digital risk management alongside traditional accounting principles.
Looking Ahead
The researchers acknowledge several limitations. Because the study used a cross-sectional survey, it captures perceptions at a single point in time rather than observing how digital auditing evolves over several years. In addition, respondents came from different professional backgrounds, which may influence how they interpret algorithm evaluation.
Future research could examine digital auditing through longitudinal studies, mixed research methods, or comparative analyses across industries and countries. Expanding future models to include variables such as AI governance, data quality, algorithm transparency, and organizational risk culture may further improve understanding of technology-driven auditing.
Author Profile
Ana Rusmardiana is a researcher and academic at Universitas Indraprasta PGRI (UNINDRA), Jakarta, Indonesia, specializing in digital accounting, auditing, information systems, and technology-driven audit frameworks. This study was co-authored with Gilang Ganjar and Subur Harahap, also affiliated with Universitas Indraprasta PGRI, whose research focuses on accounting, digital transformation, information systems, and algorithm-based auditing. The uploaded article does not specify the authors' academic degrees.
Source
Article Title: Reconstruction of Audit Frameworks from Financial Inspection toward System and Algorithm Evaluation in the Digital Ecosystem
Journal: Formosa Journal of Multidisciplinary Research (FJMR)
Publication Year: 2026
Authors: Ana Rusmardiana, Gilang Ganjar, Subur Harahap
Affiliation: Universitas Indraprasta PGRI (UNINDRA), Jakarta, Indonesia
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