Empirical analysis reveals increased audit-related regulatory inquiries following digital oversight system adoption, indicating enhanced regulatory efficiency and improved auditor behavior.
This paper examines how digital technology affects the effectiveness of regulatory agencies in identifying audit risks. The staggered implementation of the Intelligent Corporate Profile Regulatory (ICPR) system in China represents an important step towards the digitalisation of financial regulation. Empirical evidence shows that the adoption of the ICPR system increases the proportion of audit-related inquiries in comment letters. Mechanism tests suggest that this effect is driven by improved access to information and reduced resource constraints. Further analysis of the economic consequences shows that the ICPR system not only enhances regulatory efficiency but also affects auditor behaviour. Overall, the findings highlight the role of digital technology in strengthening regulatory oversight.
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Xia et al. (2026) studied this question.
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