<p>This study examines the determinants of internal audit efficiency among small and medium-sized enterprises in Saudi Arabia adopting cloud-based technologies. The research is motivated by the growing importance of digital transformation in strengthening audit functions, particularly within Saudi Arabia’s evolving regulatory landscape. Grounded in resource-based and technology-organization-environment frameworks, the study investigates how technological capability, organizational readiness, regulatory and compliance considerations, and internal control systems influence audit efficiency in cloud-enabled environments. Data were collected from 285 medium-sized enterprises between February and April 2025, and relationships were analyzed using regression analysis and structural equation modeling. The results indicate that technological capability, regulatory and compliance factors, and internal control systems have significant positive effects on audit efficiency, with technological capability emerging as the most influential determinant. Although organizational readiness initially exhibited a positive relationship, it was excluded from the final regression model due to multicollinearity, suggesting a possible indirect role. The structural model demonstrates strong explanatory power, confirming the robustness of the findings. This study extends the application of resource-based and technology-organization-environment frameworks to the context of cloud-based auditing and provides theoretical insights and practical recommendations. The findings highlight how small and medium-sized enterprises can strategically align technological resources, regulatory compliance, and internal controls to enhance audit efficiency and competitiveness in digitalized environments.</p>