Future Relevance of Innovative Information Technology in External Auditing and the Gap Between the Expertise in Sri Lanka

This study addresses a critical empirical gap by investigating the perceptions of external auditors in Sri Lanka regarding their current expertise and the future relevance such expertise in terms of innovative information technology (IT) in external auditing. The research also assesses whether discrepancies exist between auditors’ current IT capabilities and the expected expertise of emerging IT technologies. Additionally, it explores how specific auditor characteristics influence IT competence and perceptions of future relevance. A structured questionnaire was administered to a sample of 200 external auditors from both Big Four and non-Big Four firms, and the data were analyzed using descriptive and inferential statistical techniques. The findings indicate that while auditors acknowledge the growing importance of IT, a significant gap persists between their existing expertise and the skills required to adopt future IT tools effectively. This gap is most pronounced for advanced technologies such as machine learning, process mining, and robotic process automation. On the other hand, regression analysis highlights that work experience and hierarchical position of external auditors significantly influence IT knowledge and perceptions of relevance. Conversely, demographic factors such as age, gender, education, and firm size did not show a significant impact. The study underscores the need for targeted professional development, particularly for senior auditors, to bridge the technological gap. The results suggest that regulatory and educational bodies should implement strategic initiatives to ensure external auditors are equipped to meet the evolving demands of the audit profession in a rapidly changing technological landscape.