The Impact of Digitization on the Audit Client's Business Risk: An Applied Study on Companies Listed on the Saudi Stock Exchange

The purpose of this study is to know the role of digitization, its characteristics, and the extent of its impact on the client's business risks by analyzing the accounting research. as well as the role of digitization in developing the audit by improving the monitoring of client data and improving the quality of the audit by providing new digital tools that cover all customer data, which facilitates conducting a more relevant analysis of the various operations of the client and identifying most of the misstatements in the financial statements, which leads to reducing material fraud in them and thus reducing the risks of the client's business. The current study's statistical population was all listed firms on the Saudi Stock Exchange that are included in (TASI) index between 2019 and 2022. The systematic elimination method was used for the sampling, and selection of (137) corporations to represent the study sample distributed over several different economic sectors. Three results of the current study are found; the results are conclusive. First, there is a negative, significant correlation at the level of (0.01) between Digitization and audit report lag risks on Companies Listed on the Saudi Stock Exchange, which supports the validity of the first hypothesis of the study, as the correlation coefficient is negative with a value of (0.691). Second, there is a negative, significant correlation at the level of (0.01) between Digitization and earning management Companies Listed on the Saudi Stock Exchange (From the opposite angle there are positive, significant correlation with audit quality), which supports the validity of the second hypothesis of the study, as the correlation coefficient is negative with a value of (0.671). Third, is a negative, significant correlation at the level of (0.01) between Digitization and Litigation Risks Companies Listed on the Saudi Stock Exchange, which supports the validity of the third hypothesis of the study, as the correlation coefficient is negative with a value of (0.560). The current study recommends conducting a proposed frame of reference for applying business digitization techniques to reduce material misstatements in the financial statements of Saudi companies.