Auditing

Running head: AUDITING
Auditing
Name of the Student
Name of the University
Author’s note

AUDITING1
Table of Contents
Response to question 1...............................................................................................................2
Industry 4.0................................................................................................................................2
EU General data protection regulation.......................................................................................3
The VUCA world – the new level playing field........................................................................3
NOCLAR...................................................................................................................................4
Response to question 2...............................................................................................................4
Time when auditors highlight risk by issuing a going concern in their report..........................4
Cultivation of the appropriate level of scepticism by the auditors.............................................6
Response to question 3...............................................................................................................7
Discussion of the statement “Beware of the auditors, they only tick boxes”............................7
Response to question 4...............................................................................................................8
Effect of the following concepts on the decision making capacity of the auditors....................8
Four organisational constraints that would impact auditors decision making.........................11
References................................................................................................................................12

AUDITING2
Response to question 1
Industry 4.0
Industry 4.0 is a concept that is primarily used for describing the revolution of
industries. Specifically the term relates to the fourth industrial revolution. This revolution is
said to bring about new technologies in different machines (Schuh et al. 2015). Under this
technology, the machines have wireless connection and sensors. The machines are attached to
a system of production which can foresee the entire production line and make decisions
accordingly. According to Industry 4.0 revolution, the machine systems are slowly moving
towards automation and are most used in the manufacturing industries (Schuh et al. 2015).
The different components of this system include smart manufacturing, smart factory, cloud
computing, artificial intelligence, industrial internet of things and many others.
The concept of smart factory emerged through this revolution. The smart factory
system is incorporated with several sub-components (Schuh et al. 2015). One of these
components is cyber-physical system whose function is to monitor the physical processes
going on in the industrial system. Based on the results found, a virtual copy of the physical
world is created and futuristic decisions are made accordingly.
EU General data protection regulation
The EU General data protection regulation is acronymed as GDPR. It has replaced the
previously implemented regulation which was referred to as Data Protection Directive
95/46/EC (Tankard 2016). One of the primary objectives of this regulation include
harmonizing data privacy laws that are mainly based on Europe. Another objective is to
protect and empower the privacy of the data of citizens belonging to European Union. The
regulation also aims at reforming the data privacy approach of the different organisations
across the European region.

AUDITING3
The EU General Data Protection Regulation also performs many other key functions.
The management of data by the different industrial sectors of the European economy is
guided by this regulation (Tankard 2016). The roles of the higher management of the
businesses are redefined through this regulation. According to this regulation, it becomes the
responsibility of the management to ensure a watertight consent management process as well
as an data rights management systems. This is required for retaining the valuable data of the
business.
The VUCA world – the new level playing field
The VUCA is an acronym for Volatility, Uncertainty, Complexity and Ambiguity.
Volatility represents the nature, volume, magnitude as well as the dynamics through which
any change has occurred in the organisation (Bennett and Lemoine 2014). Uncertainty
relates to the situation in which the managers are unable to predict the issues and events that
are going to occur in future. Complexity talks about the complex nature of the chaos as well
as issues that surround the entire organisation. Ambiguity explains the lack of clarity of the
situations and mixed meanings of the different conditions.
The concept of VUCA has first been introduced by the Army War College of U.S.
The terms incorporate into VUCA are used for describing the outer world of the business that
is termed as volatile, uncertain, ambiguous and complex (Bennett and Lemoine 2014). The
concept has recently taken its root in the ideas of strategic leadership that is used in a wide
range of organisations.
NOCLAR
NOCLAR is the term that has been first coined by the International Ethics Standards
Board for Accountants (IESBA). The board updated the principles that governs the way by
which the accountants are required to respond to the non-compliance of the clients with the