IMPLEMENTING DIGITAL AUDITING FROM THE PERSPECTIVE OF THE DIKW DATA TRANSFORMATION PYRAMID MODEL

Abstract

Digital transformation has brought profound changes to various industries, with auditing being one of the most significantly impacted fields. Digital auditing is not merely about adopting advanced technologies, such as Artificial Intelligence (AI) and Big Data Analytics, but also requires a clear theoretical framework to organise and effectively exploit data. The DIKW (Data-Information-Knowledge-Wisdom) pyramid model offers a robust methodology, enabling auditors to transform raw data into information, knowledge, and ultimately wisdom, thereby supporting strategic decision-making. This article examines the transition from traditional auditing to digital auditing through the lens of the DIKW (Data, Information, Knowledge, Wisdom) pyramid model. The study reveals that the maturity of digital auditing activities within an entity/organisation closely correlates with the degree to which data is transformed into knowledge and wisdom as per the DIKW model. From the perspective of the DIKW model, the research particularly emphasises the impact of AI and Big Data in helping entities/organisations build sound digital transformation strategies. It also analyses the promotion of AI applications in auditing activities, linking it to each level of the DIKW model to implement digital auditing effectively and efficiently