University Name, ACC321: Technology in Audit Engagements Report

This report, prepared by a student, explores the significant impact of technology on audit engagements. It begins with an email to a colleague discussing three key technologies: drone technology, cybersecurity tools, and intelligent automation. The report provides a brief explanation of each technology, highlighting their disruptive potential by reducing the need for human auditors and enabling advanced data analysis. Drone technology offers new perspectives and efficiencies, cybersecurity tools mitigate the risks associated with large datasets, and intelligent automation streamlines audit processes through predictive analytics, digital automation, and cognitive technologies. The report then discusses the potential for these technologies to replace human auditors, concluding that while technology will change the way auditing is performed, human auditors will still be essential for applying skepticism and judgment. Finally, the report suggests the adoption of intelligent automation due to its advanced features and benefits for audit engagement, including effective communication and analytical procedures, which will assist auditors in conducting efficient and effective audit programs. The report also includes detailed rationales for each technology, referencing relevant sources.

Running head: TECHNOLOGY IN AUDIT ENGAGEMENTS
Technology in Audit Engagements
Name of the Student
Name of the University
Author’s Note

1TECHNOLOGY IN AUDIT ENGAGEMENTS
Table of Contents
Section 1: Email to Savannah....................................................................................................2
Section 2: Rationale supporting the Email.................................................................................4
References..................................................................................................................................7

2TECHNOLOGY IN AUDIT ENGAGEMENTS
Section 1: Email to Savannah
From: [e-mail]
To: [e-mail]
Subject: Use of Advanced Technologies in the Auditing Profession
Dear Colleague,
In the recent years, the way of auditing has been massively affected by the inception of
certain key technologies as these are creating significant impact on different aspects of audit
engagement. Among all of these technologies, three technologies affecting the audit
operations are discussed below.
Brief Explanation of Three Technologies
Drone Technology – The use of drone technology is increasing in auditing for improving
and enhancing both the efficiency and effectiveness of crucial audit works. Through the
integration of drone technology with other advanced technologies like data analytics and
artificial intelligence, the auditors can use drones for many audit tasks.
Cyber security – Since the auditors have to deal with large amount of data, there is
significant and continuous risk of cyber-attack. The use of advanced tools in cyber security
helps the auditors in mitigating the risk of cyber-attack on large amount of audit data.
Intelligent Automation – Auditors all over the world are increasingly using intelligent
automation tools for the effective use of digital data while fulfilling the auditing
responsibilities within the organizations. The main components of intelligent automation are
predictive analytics, digital automation and cognitive technologies.

3TECHNOLOGY IN AUDIT ENGAGEMENTS
Discussion on Disruptive Potentials of these Technologies
The common disruptive feature of these three technologies is the requirement of minimum
human auditor’s involvements for operating them and this reduces the scope of human bias in
audit decision-making process. These technologies are highly advanced and their main
advantage can be seen in applying advanced data analytical processes on large amount of
audit data. Lastly, these features assures speedy delivery of required audit information in the
engagement team that facilitates enhanced communication.
Comment on Replacing Human Auditors
It is true that the highly advanced features of these technologies need minimum involvement
of human auditors, but the human auditors are required to operate them as they cannot be
self-operated. Moreover, these advanced technologies cannot replace the need for applying
scepticism and judgements by the human auditors in different levels of audit engagement.
Auditors face such audit circumstances where the audit outcome depends on their personal
judgments which cannot be done by these advanced technologies. Thus, there will be
reduction in the number of human auditors due to these technologies, but human auditors
cannot be fully replaced.
Comment on Appropriate Technology
It can be said on the basis of the above discussion that the application of intelligent
automation would be appropriate for the firm to adopt because of its advanced features in
every aspect of audit engagement like analytical procedures, effective communication and
others. This would assist the auditors in effective and efficient audit programs.
Based on the above discussion, it can be concluded that these advanced technologies will
change the way of auditing, but they still need the human auditors to operate them. Thus,
human auditors will not be redundant.

4TECHNOLOGY IN AUDIT ENGAGEMENTS
Section 2: Rationale supporting the Email
Drone technology, cyber security technology and intelligent automation are the three
advanced technologies impacting different aspects of audit engagement. The above
discussion involves providing brief explanation on these technologies and the details
rationales are shown below.
Drone Technology
Use of drones can be considered as an effective way of incorporating advanced
technology in auditing because this technology has the ability of providing a different
perspective to the auditors that no other technology can give (Appelbaum and Nehmer 2017).
Large audit firms are integrating advanced technologies like artificial intelligence and data
analytics in drones for accomplishing different tasks in auditing (cpacanada.ca 2019). For
instance, drones can help the auditors in auditing for items in hard-to-reach places. Drones
include digital technology that is very small and easy to use. For example, the auditors can
put cameras on drones for getting feeds while sending them in places where a person cannot
reach.
Many audit experts are considering the presence of the audit quality elements one in
the drone technologies. The recent years have witnessed large use of drone technology in
auditing because of the drop in its price while they have the ability of providing higher
quality of audit (Appelbaum and Nehmer 2017). Other major benefits of the use of drones are
cost saving and time saving. At the same time, utilization of drones leads to risk removal
because they have the ability of flying long durations and they can do the traditionally unsafe
works. It can be said that there will be increase in the use of drone technology in auditing in
the near future due to the presence of its advanced features. The use of this technology will
reduce the involvement of human auditors in audit engagement (Lin et al. 2018).

5TECHNOLOGY IN AUDIT ENGAGEMENTS
Cyber security
Auditors are required to deal with huge amount of accounting data while conducting
the audit engagements of the companies and this leads to the risk of cyber-attack on these
data. Cyber threat is a major threat that can be mitigated with the help of advanced
technology cyber security tools which are considered as the third line of defence
(deloitte.com 2019). The advanced cyber security tools work in accordance with three
approaches; they are secure, vigilant and resilient. Under the first approach, the cyber security
tools establish different controls like perimeter defences, identity management and data
protection for guarding the data against known and unknown cyber-threats.
Under the vigilante approach, cyber security tools use techniques like threat
intelligence, security monitoring and cyber risk analysis for the detection of malicious and
unauthorized cyber activities for helping the auditors in the reduction of overall cyber threats
(deloitte.com 2019). Under the approach of resilient, advanced cyber security tools are used
in the forms of incident response protocol, forensics, business continuity and disaster
recovery plans for the recovery of data as well as reduction of impact (Lanz 2014). It can be
said that these tools assist the auditors in uninterrupted analysis of data in audit engagement
while ensuring the effective communication of required audit information within the
members of the audit engagement team.
Intelligent Automation
Intelligent automation is one of the major advanced technologies impacting the audit
profession from different aspects. There are three divisions under this advanced technology;
they are predictive analysis, digital automation and cognitive technology. Predictive analysis

6TECHNOLOGY IN AUDIT ENGAGEMENTS
provides assistance to the auditors in gaining a deeper and robust understanding of business
data with the utilization of advanced analytical procedure (Kokina and Davenport 2017). The
auditors gain the required analytical capabilities and knowledge for audit analysis. On the
other hand, digital automation assists the auditors in the analysis as well as evaluation of
larger data sets that enables a more gritty analysis of underlying audit data through the use of
algorithm (Sakthivel, Kandasamy and Vimal 2019). This makes the auditors able in the
recognition of unique transactions for pinpointing data performance irregularities. This also
improves visualization of auditing data.
Another major part of intelligent automation is the cognitive technologies. This assists
the business organizations in the effective analysis of larger volume of audit data that
includes large amount of unstructured data (Sakthivel, Kandasamy and Vimal 2019).
Moreover, the auditors become able in identifying the exceptions in audit data. On the overall
basis, these technologies assist in professional audit judgement and audit decision-making.
All these indicate towards the fact that intelligent automation assist the auditors in conducting
audit engagement through analytical procedures (home.kpmg 2019). Moreover, this reduces
human auditor involvement and reduces the scope of human bias in the auditing decision-
making process. On the overall basis, intelligent automation plays crucial role in audit
engagement.

7TECHNOLOGY IN AUDIT ENGAGEMENTS
References
Appelbaum, D. and Nehmer, R.A., 2017. Using drones in internal and external audits: An
exploratory framework. Journal of Emerging Technologies in Accounting, 14(1), pp.99-113.
Deloitte United States. 2019. Cybersecurity and Internal Audit. [online] Available at:
https://www2.deloitte.com/us/en/pages/risk/articles/cybersecurity-internal-audit-role.html
[Accessed 23 Oct. 2019].
Home.kpmg. 2019. [online] Available at:
https://home.kpmg/content/dam/kpmg/us/pdf/2016/11/us-audit-CognitiveFactSheet.pdf
[Accessed 23 Oct. 2019].
Kokina, J. and Davenport, T.H., 2017. The emergence of artificial intelligence: How
automation is changing auditing. Journal of Emerging Technologies in Accounting, 14(1),
pp.115-122.
Lanz, J., 2014. Cybersecurity governance: The role of the audit committee and the CPA. The
CPA Journal, 84(11), p.6.
Lin, C., He, D., Kumar, N., Choo, K.K.R., Vinel, A. and Huang, X., 2018. Security and
privacy for the internet of drones: Challenges and solutions. IEEE Communications
Magazine, 56(1), pp.64-69.
Rotberg, E., About the Author Ethan Rotberg Ethan Rotberg is a digital producer for CPA
Canada, f. and Rotberg, E. 2019. Eye in the sky: How drones are assisting with audits.
[online] Cpacanada.ca. Available at: https://www.cpacanada.ca/en/news/innovation/2019-02-
12-audit-drones [Accessed 23 Oct. 2019].

8TECHNOLOGY IN AUDIT ENGAGEMENTS
Sakthivel, A.R., Kandasamy, J. and Vimal, K.E.K., 2019. Auditing for Evaluating the Degree
of Agile Practices Implementation. In Emerging Applications in Supply Chains for
Sustainable Business Development (pp. 23-39). IGI Global.
Www2.deloitte.com. 2019. [online] Available at:
https://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-risk-cyber-ia-urgent-
call-to-action.pdf [Accessed 23 Oct. 2019].