Auditing in the Digital Age: The Role of IoT, Staff Training and Client Confidentiality

ABSTRACT This study examines how auditing IoT data impacts client confidentiality and the role of professional competency development in mitigating associated risks. Using survey data from 242 external auditors, structural equation modelling reveals that while IoT auditing increases confidentiality risks due to heightened data exposure, professional competency development significantly mitigates these threats. Well‐trained auditors enhance security, ensuring more effective data management. However, reliance on self‐reported data introduces potential bias, and a cross‐sectional design limits causal interpretations. Future research should explore objective breach records and internal auditors' confidentiality strategies. Practically, firms must implement advanced training programmes, regulators should update auditing standards and clients should engage auditors proficient in IoT security. This study extends Organizational Information Processing Theory, shifting the focus from IoT's efficiency benefits to its confidentiality challenges. The findings provide crucial insights for firms and regulators seeking to balance technological advancements with robust confidentiality safeguards.