Digital Transformation and Audit Pricing: The Learning Curve Effect

Digital transformation involves a systemic restructuring of companies’ business processes. The objective of the study is to analyze the impact of digital transformation, represented by intangible assets, on audit service fees. A sample of 1170 listed European companies was used during the period 2018–2023. To test the digital transformation, three indicators containing intangible assets were chosen: the ratio of intangible assets to total assets, their variation in the current year and their variation in the previous year. Using fixed-effect regressions and OLS, we obtain that audit fees increase when the asset structure contains a higher share of intangible assets. The results show that a complex asset structure is related to an increase in the audit effort. Also, initial investments in digital transformation are associated with an increase in fees in the first year. However, a reduction in costs is observed, starting from the second year after the investment in digitalization. This dynamic is consistent with the theoretical model of the Learning Curve, suggesting that although digitalization is initially associated with high assimilation costs, it correlates with increased efficiency in the long term. Systemic adaptation of auditors to the structure and complexity of intangible assets improves the efficiency of the entire governance mechanism.