Adapt or die : Lessons on Digitalization and DynamicCapabilities in the Auditing and AccountingIndustries after the COVID-19 Pandemic

This study explores how the Swedish auditing and accounting industries adapted to theaccelerated digital transformation triggered by the Covid-19 pandemic, and which changeshave become permanent. The theoretical framework is based on the Dynamic CapabilitiesTheory, which analyzes how firms identify threats and opportunities, seize thoseopportunities, and transform internal resources and knowledge in rapidly changingenvironments.To fulfill the aim of the study, a qualitative research design was employed. Empirical datawas collected through semi-structured interviews with eight professionals working in theauditing and accounting sectors, representing both private firms and public organizations.The data was analyzed using the Gioia methodology and interpreted through the lens ofDynamic Capabilities Theorys three core dimensions.The findings reveal that the pandemic acted as a catalyst for digitalization in industriespreviously characterized by traditional and paper-based practices. Digital tools and methods,such as cloud-based audit systems, electronic signatures, and virtual meetings were rapidlyimplemented and became essential components of daily operations. In many organizations,these changes have remained, while others have partly reverted to pre-pandemic practices.A key factor for successful adaptation was the organization’s ability to respond flexibly.Firms that had already invested in digital infrastructure and skills demonstrated higherabsorptive capacity and were able to adapt more efficiently.The study contributes to the understanding of how dynamic capabilities manifest in regulatedand knowledge-intensive industries, and highlights that digital transformation is not merely atechnical challenge but also a strategic and cultural one. The results are relevant to bothscholars and practitioners engaged in change management and digital strategy.