A LITERATURE REVIEW ON THE ADOPTION OF ARTIFICIAL INTELLIGENCE IN EXTERNAL AUDITING: INNOVATIONS FOR SUSTAINABLE DEVELOPMENT IN THE DIGITAL ECONOMY ERA

Abstract

The 4.0 industrial revolution has driven the utilization of Artificial Intelligence (AI) that has the potential to transform the field of external auditing. This study employs a systematic literature review to identify, evaluate, and synthesize various findings on the application of AI in auditing. The analysis reveals that AI plays a strategic role in supporting the achievement of sustainable development goals (SDGs) by enhancing the accuracy and effectiveness of audits on non-financial reporting, such as ESG data. AI-based innovations like continuous auditing and predictive analytics foster "smart auditing," which is more efficient and supports sustainable business practices. Consequently, the auditor's role is transforming from a retrospective examiner to a strategic advisor requiring skills in data analysis, technological literacy, and an understanding of digital ethics. Nevertheless, AI implementation faces significant challenges, including a lack of algorithmic transparency (the "black box" effect), potential bias, competency gaps, and an urgent need for adaptive regulatory frameworks to ensure accountability and data security.