2.1. Resource-Based View (RBV) Theory
This paper builds on the Resource-Based View (RBV) theory as the basis for the study model due to its robust theoretical foundation and relevance to our research objectives. This theory emphasizes the importance of internal organizational resources and capabilities in achieving sustained competitive advantage [7]. In the context of this study, the RBV theory examines the firm-specific resources and capabilities that contribute to readiness for technological change. Other theories may focus solely on external environmental factors or individual-level variables whereas the RBV theory allows us to delve into the unique internal resources and capabilities that shape firms' ability to adopt CAATTs effectively [4]. Moreover, it aligns with the premise that firms with valuable, rare, and difficult-to-imitate resources are better positioned to leverage technological innovations for competitive advantage [7].
2.2. The Covid-19 Pandemic
Covid-19 was first announced in December 2019 in Wuhan-China [8]. A few months later, the WHO declared the Covid-10 outbreak as a Public Health Emergency of International Concern (PHEIC). This was induced after the spread of Covid-19 to another 25 countries with more than 70 thousand confirmed cases and more the 2 thousand deaths in the first quarter of 2020 [1, 8]. In Jordan, the first confirmed case was reported in March 2020, where the government immediately closed the country’s land and air borders, banned gatherings of ten or more people, and closed public and private institutions and offices, except for the health sector and basic services (Prime Minister, 2020).
The government’s strict measures to curb Covid-19 impacted the different industries in the country including the education sector, manufacturing firms, construction institutions, and services companies [9–11]. The main impact of the Covid-19 pandemic on the different enterprises in Jordan included cash flow deficiencies, lack of supply and demand, operating time disruptions, and temporary closure [10]. Firms, therefore, needed to adapt to the new work environment to avoid temporary or permanent closures. For the education sector, the government initiated a free eLearning platform called “Darsak” to replace the traditional face-to-face education system in schools [12]. Similar attempts were employed in the different affected sectors in the country where the transfer from conventional work environments to a more flexible environment, taking advantage of available technology tools and techniques, is among the few options that firms have considering lockdowns and restrictions on gatherings policies enforced by the state.
2.3. CAATTs in Jordan
The Jordanian Association of Certified Public Accountants (JACPA) was established in 1988 to administer professional certification examinations for accounting professionals in Jordan. It is responsible for overseeing members' compliance with accountancy standards through a monitored system and provides accounting and auditing standards to the Higher Council for the Accountancy Profession (HCAP), as well as recommending ethical requirements to the HCAP. The JACPA aims to contribute to the development of the accounting profession and became a member of the International Federation of Accountants (IFAC) in 1992, which seeks to develop high-quality international auditing standards and encourage the exchange of technical information and innovation between member bodies [13].
Therefore, the JACPA seeks to contribute to enhancing and developing the accounting profession and to adopt any practices that improve audit practitioners' ability to provide high-quality audit services. One recent innovative development in the audit profession is the introduction of e-audit services applications, or Computer-Assisted Audit Tools and Techniques (CAATTs), which can improve audit quality, lower costs, and increase flexibility and market share [14]. Furthermore, to assist auditors in performing audit services more efficiently, the Information Systems Audit and Control Association (ISACA) recommends the use of CAATTs. In Jordan, the adoption of CAATTs is influenced by technological, organizational, and environmental (TOE) factors, such as compatibility, organizational readiness, top management support, auditors' competency, audit task complexity, entity size, and government regulation [15, 16]. Hence, it is important to investigate both the internal and external constructs affecting the readiness of Jordanian-listed firms toward the application of CAATTs.
In the Jordanian context, the dynamic landscape of the country's accounting profession shaped the emergence of both challenges and opportunities associated with the adoption of CAATTs. These challenges were more pronounced during the backdrop of the COVID-19 pandemic. The problem affects Jordanian-listed firms striving to adapt to new operational norms during the strict measures imposed by the pandemic. Attempts to address this challenge have been spearheaded by the JACPA, aligning with its commitment to advancing the accounting profession. JACPA actively encourages the adoption of e-audit services through CAATTs, recognizing their potential to enhance audit quality, reduce costs, and increase flexibility. The association's advocacy reflects a strategic response to the unprecedented conditions induced by the pandemic, aiming to support audit practitioners in navigating the evolving landscape. Additionally, studies by Magablih (2019) and Al-Okaily et al. (2022) in the Jordanian context emphasize the positive impact of CAATTs on audit costs, fees, and adoption determinants, providing a foundation for our study's focus on the auditee perspective based on the ORC model the TRI factors.
2.4. Organizational Readiness for Change
There is a vast amount of literature discussing organizational change, where most previous studies focus on organizational change approaches including direct change, planned change, and guided change [17–20]. The direct change approach is when the change is taking effect through the top of the organizational hierarchy as role models for the remainder of the organization members. Whilst planned change approach takes place at any level of the organization as long as the change is considered acceptable by the top management. For a guided change approach, change takes place eventually as all organization members change in a committed manner to achieve the organization’s goals and therefore the change occurs accordingly. It is found that resistance to change is more likely to be present in the direct change approach compared with both planned and guided change.
Other literature focuses on the factors impacting the readiness to change instead of the change itself [21–23]. This study develops a new model based on the Organizational Readiness for Change (ORC) and the Technology Readiness Index (TRI) to examine the individual factors impacting the readiness of Jordanian-listed firms toward CAATTs application. [24] define organizational readiness to change as the organization’s ability to adapt to change. However, technology readiness is defined as the potential inclusion of new techniques by an individual using the available technologies to successfully accomplish their ordinary tasks [6, 25, 26].
The ORC framework illustrates the organizational and individual factors that influence the organization’s ability to adopt new technology [5]. It highlights 18 factors impacting organizational change categorized into four main domains. The first domain deals with the motivation for change, and it includes three factors, namely program need for improvement, training needs, and pressure for change. These factors reflect the current perceptions of the individuals in the organization toward the need for change, where if not triggered sufficiently it will be difficult for the change to occur. The selection of the ORC model for this study is justified by its established comprehensive framework for understanding the organizational and individual factors that influence an organization's readiness to adopt new technology (Lehman et al., 2002). The ORC model allows us to systematically examine the external constructs shaping behavioral responses to technological adoption. Therefore, the utilization of the ORC model aligns with our study's objective of examining the factors influencing firms' readiness toward CAATTs application, providing a robust theoretical framework to guide our analysis.
The application of e-audit services, through CAATTs, is usually present in an environment where it is perceived that such services will positively impact the audit assignment [27, 28]. When the organizational culture views change as a continuous activity that extends the institutional capabilities, this in turn improves the organization’s readiness to change [24, 29]. From the employee perspective, such change can occur when it has a positive impact on job security and job recognition [30, 31]. Moreover, the Covid-19 environment forced a workplace where the ability to use technology in completing tasks is crucial to maintaining any business [32], and hence the fear of Covid-19 impacts employees’ job security and therefore their motivation for change. Based on the previous discussion we develop the following hypotheses.
Hypothesis 1
Motivation for change has a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
Hypothesis 2
Perceived fear of Covid-19 increases motivation for change influence on the readiness of Jordanian-listed firms toward CAATTs application.
The second domain in the ORC investigates staff attributes that impact organizational change, where it consists of four factors namely growth, efficacy, influence, and adaptability (Jamai et al., 2022). Where it is very important for employees to have the skills needed to complete their assigned tasks. [24] demonstrate that the skills the employees obtain must match their job description, and hence employees should have the ability to adjust their skills based on the changing circumstances to keep their jobs. The application of CAATTs not only requires auditors to have certain skills but also the client should have a compatible system that accountants at that firm can also use. Hence, we presume that staff attributes influence an organization’s readiness to change and based on that we develop the following hypothesis.
Hypothesis 3
Staff attributes have a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
The third domain is concerned with institutional resources and includes five elements, namely offices, staffing, training resources, computer access, and e-communications. The change capacity of an organization refers to its ability to attempt change, which depends on three factors that [19] summarize as willingness, infrastructure, and resources. Hence, the readiness to change for an organization is subject to its capacity regarding the new environment. The application of CAATTs requires the company to adopt it to certain resources such as communication technologies, information systems, and procedural manuals and training for employees. Hence, alongside the motivational and staff attributes the firm should also have the required institutional resources to change to new technology [33]. We conjecture that the readiness of firms to apply CAATTs is impacted by the available institutional resources and hence formulate the following hypothesis.
Hypothesis 4
Institutional resources have a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
The fourth and final domain of the ORC framework is organizational climate, and it explores six aspects, namely clarity of mission and goals, staff cohesiveness, staff autonomy, openness to communication, and openness to change. Different from both staff attributes and institutional resources domains, this category deals with the general atmosphere of the intuition toward change. [24] propose an institution that adopts the notion of a Learning Organization (LO) gains a competitive advantage in the business environment, moreover, it has more potential and better opportunities to manage change. Where the Learning Organization is defined by many scholars as an institution that constantly improves its processes by building on either individuals or groups from the inside of the organization to enhance the firm’s competitive advantage through change [34–37]. An organizational climate that meets the Learning Organization criteria can in turn impact the firm’s capabilities toward change (Osagie et al., 2022), which is in this context firm’s readiness to adopt CAATTs. Based on the previous discussion we formulate the following hypothesis.
Hypothesis 5
Organizational climate has a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
Figure 1 illustrates the relationships proposed in the ORC framework that was developed by Lehman et. al. (2002) and used to formulate the aforementioned research hypotheses.
2.5. Technology Readiness Index
The Technology Readiness Index (TRI) proposes four dimensions that influence an organization’s readiness toward change, namely optimism, innovativeness, discomfort and insecurity [6, 38]. Where optimism and innovativeness are drivers for readiness to change, in particular, optimism reflects a positive perception that encourages the adoption of new technology in order to achieve better control, more flexibility, and enhanced efficiency of work. Innovativeness represents the individuals’ tendency toward becoming pioneers in their area by adopting new technology. In our context, we conjecture that the use of CAATTs represents the new technology for accountants, and hence formulate the following hypotheses.
Hypothesis 6
Optimism has a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
Hypothesis 7
Innovativeness has a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
On the contrary, the TRI index's two other dimensions represent the inhibitors to change, namely discomfort and insecurity. Where discomfort is characterized when individuals perceive a lack of control over the new technology or they do not feel capable of using it. While and insecurity about new technology is present when individuals lack trust in the ability of the new technology to accomplish their assigned tasks. Therefore, we construct the following research hypotheses.
Hypothesis 8
Discomfort has a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
Hypothesis 9
Insecurity has a significant influence on the readiness of Jordanian-listed firms toward CAATTs application.
The TRI model is presented in Fig. 2 below to illustrate the relationships used to formulate the before-mentioned hypotheses.
2.6. Study Model
This research significantly contributes to the organizational change literature by focusing on the auditee perspective within the unique context of Jordanian-listed firms during the post-COVID-19 period. Grounded in the integration of the ORC model and the TRI, the study offers a nuanced understanding of individual factors influencing the firms' readiness for the application of CAATTs. The geographical and historical dimensions are considered, aligning with the specific socio-economic conditions of Jordan and incorporating insights from relevant studies within the Jordanian context. This approach provides valuable insights into both the challenges and opportunities faced by auditees. In particular, it emphasizes the social, scientific, and historical relevance of the study in the evolving landscape of technology adoption in auditing practices.
This study targets the institutional setting of Jordan for several reasons. Firstly, Jordan represents an emerging market, making it an interesting setting to investigate the adoption of CAATTs within a growing economy. Secondly, the country's unique socio-economic and regulatory environment and its changes due to the pandemic present specific challenges and opportunities for the implementation of CAATTs. Thirdly, the JACPA plays a significant role in shaping the accounting profession, providing a conducive environment for studying CAATTs adoption initiatives. The research model used in this study is presented in Fig. 3.
The factors incorporated into the research model are based on a comprehensive understanding of organizational change and technological adoption literature. Drawing on seminal works by scholars such as Osagie et al. (2022), Wijethilake et al. (2023), and Shahreki et al. (2023), the study model integrates the ORC model and the TRI considering both external and internal constructs impacting the readiness of Jordanian-listed firms toward CAATTs application. The ORC framework focuses on the external constructs shaping behavioral responses to technological adoption. The TRI model, however, offers insights into individual factors influencing readiness. This comprehensive integration between these models ensures capturing the multifaceted nature of readiness for technological change, enhancing the validity and applicability of our findings.