AI in audit process: how adoption rates are shaping the future of audit firms in China

The rapid advancement of Artificial Intelligence (AI) has ushered in transformative changes across industries, with auditing emerging as a critical area of application. This study explores the adoption of AI in auditing processes within Chinese audit firms, emphasizing the interplay between technological readiness, organizational culture, regulatory pressure, and management support. Using the Technology-Organization-Environment (TOE) framework, this research examines the extent of AI adoption, identifies key drivers and barriers, and assesses the implications for audit quality and operational efficiency. The study employs a quantitative research methodology, gathering data from 407 professionals across small, medium, and large audit firms in China. Findings reveal that technological readiness and management support are pivotal in driving AI integration, while regulatory complexities and organizational culture act as both enablers and inhibitors. Regression and correlation analyses indicate that firms with higher technological and managerial alignment exhibit greater levels of AI adoption, particularly in automating routine tasks, enhancing risk assessment, and improving audit precision. However, disparities in technological infrastructure and regulatory adherence highlight the need for a more cohesive policy and investment strategy. This research contributes to the academic discourse on AI in auditing by presenting a comprehensive analysis of its adoption in the Chinese context, offering practical recommendations for policymakers and practitioners to bridge gaps in readiness and implementation. The findings provide valuable insights into the evolving landscape of digital auditing, underscoring the need for strategic alignment to harness AI's full potential in achieving enhanced audit quality and sustainability.