AUDIT 13: ACC621, Semester 2: Audit Technology Impact on Roles

This report examines the impact of technological advancements, particularly artificial intelligence (AI), Robotic Process Automation (RPA), and data analytics, on the roles of auditors. The report begins with a discussion of how these technologies are affecting the audit profession, including the use of AI for tasks requiring intelligence, RPA for automating repetitive tasks, and data analytics for improved testing and analysis. The report then analyzes the effects of these technologies on auditors, including the potential for increased efficiency, reduced bias, and the potential for auditors to be replaced by technology. The author argues that while data analytics is the most efficient technology, human auditors are still crucial for certain tasks. The report also discusses the role of social media marketing in business, the problem-solving and analytical processes of data analytics, and pertinent issues in the business context. Finally, the report concludes that while technology is advancing in auditing, human auditors remain essential, especially for smaller firms, and the author advises larger firms to adopt technologies in their audit processes.

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Issues in auditing practice
Student’s name
Course
Instructor’s name
Institutional affiliation
City and state
Date

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E-mail
RE: Reply on how advancements in technology will affect your role in the audit team
From:
To: Savannah
Almost all companies in the field of production are experiencing frequent changes that
have ended up affecting the auditors too. Some of the advanced technologies that are seriously
affecting the profession of audit include the following;
Artificial intelligence: Artificial intelligence implies machines taking over works that
need ‘intelligence’ say knowledge, sensing, learning, reasoning-capacity, achieving targeted
goals, developing new things, creating and adopting a language. This kind of technology is
normally termed as ‘evolving technology’ that is serviced with systems of computers with things
that are allied with the intelligence of humans. These machines will have to take on the activities
performed by human beings mainly in the auditing department
‘Robotic Process Automation’: Robotic Process Automation is a software that is
instructed and programmed by several users to perform tasks based on rules, repeated and of
high volume in the current economy where there are various integrated systems that are loose. In
most cases, Robotic Process Automation is applied where there is need to transfer output of one
‘financial process’ to another or even several information sources require to be consulted. As
many companies are adapting this kind of technology, auditors are having a powerful tool to
accurately report information and improve on the auditing quality with a benchmark of
comparative data.

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Data analytics: It includes tools of analysis that have been employed from both systems
of operations and accounting for quite a longer period. Some companies have abruptly changed
from the local sampling techniques to use of data analytics in testing their transactions. The data
analytics system is a very better technology system the gives the auditing department the
potential to generate high quality audit.
The effects of these technologies on the ways auditors like you may face in your career
also include the following;
The ideology of technologies in audit teams are very crucial to aid their roles in the
businesses. It is evident that, communication can be attained through utilization of technologies
to give information in order to analyze current information to aid presentation. Auditors present
information to the clients after collecting and analyzing the data in order to aid decision making
in the businesses. For the purpose of getting maximum value emanating from the audit through
identifying areas of improvement and risk, internal audit moves in relation to data analytics
about the audit cycle.
Technologies have supported the analytical procedures at different audit stages in that it
takes different stage in order to yield effective communication in audit teams. It is believed that
the analytical part about auditing is done effectively especially when the auditors and the clients
reach to their equilibrium as in communication.
Also, these technologies have decreased the auditors’ participation in decision making in
that when audit teams use machines to audit, the biasness among the clients is reduced since
auditors provide consistent, reliable and error free reports.

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Potential of auditors to replace human auditors is very high too basing on the reason
below;
Many companies have currently replaced technology systems with human labour giving
their reasons that these technologies can easily provide relevant and accurate results. According
to my own perception, technology partly has the potential of replacing human auditors. The data
analytics technology is suitable in making analysis about future. Inaccurate and much doubt by
the clients is likely to occur more than the results obtained by technology systems.
However, although these three technologies are all important, the most appropriate
technology is ‘Data analytics’ that is most efficient that our firm can easily take on. Many
businesses find it difficult to accurately audit the entire organization. However, the organization
can resort to use of data analytics technologies that make it easy to audit the entire organization
within just a short period.

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Rationale
Introduction
Several businesses carried out in different companies all over the globe employ
technology in their day to day operations simply because machines operate faster and the results
obtained seem to be better compared to that of human beings (Patel et al, 2010).
Identification of digital communication tool/ channel and its specific purposes
Social Media Marketing
Currently, social media has moved from being just a digital channel for mobilizing to one
of the strongest tools in the marketing sector for all brands and businesses (Harris, 2017). All the
social media platforms like facebook, YouTube, WhatsApp, LinkedIn are employed to help the
company in marketing. Large societies and networks have been reached through the use of
social media to allow interaction with customers. Sharing of information and opinions and
participation in discussions at any time is encouraged (Patel et al, 2010). In the current world,
businesses can ‘leverage social media platforms’ to develop awareness of their commodities and
services. They are also able to identify and interact with their potential customers who are far
from the business premises. Examples of social media platforms are meetings on ezTalks,
Whatsapp, social intranet software.
The outcome is that the clients are free to interact with their suppliers from the businesses
and so the difficulty of client-business relationship is solved. This will in turn increase on the
amount of sales for the business.

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Another outcome is that the business is able to advertise and provide information about
other new products on market and to curb a larger section of the market. Through advertising, the
business is likely to perform well and supply more as a result of increased demand.
Also, using this tool is that the customer can provide the business with information on
whether the business is performing better or worse regarding on the type of products produced.
The company gets to know what its customers need and improve on their quality of goods.
Problem-solving and/or analytical processes and decision-making process
For the case of data analytics, auditors attain knowledge of collecting, processing and
presentation of financial data for any specified company. This is because data analytics involves
estimation of trends, useful information and patterns by using the historical or current data about
finances. This therefore helps to aid the managerial operations and put companies to the next
levels in terms of service delivery (The Financial Reporting Council Limited, 2017). In this
context, advancement of such technologies have been considered as catalyst to change operations
within the organization or environment thus bringing audit into transformation (Sirois, 2017).
The presence of data and great technologies redefine the focus facts about risk evaluation
(Omoteso, 2012). This therefore helps the auditors to attain effective view on the company risks
and the way to resolve such issues.
Technologies more so data analytics (statistical packages) help in the entire process
through evaluating and understanding profile of the risk and audit planning. The technologies
help the internal auditors to always stick on evaluating the compliance in relation to the business
policies, objectives and strategies. Therefore, technologies can effectively manage resources,

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track and give audit progress in delivering reliable information to the individual clients,
organizations and to big firms (FEI Daily Staff, 2017). This therefore highlights the value of
auditing in organizations especially when the businesses show positive trends in their
performances.
Analysis about Pertinent issues in the business context
Several business entities should actively seek to identify essential business issues to be
considered as part of their decision making process (Moretti, 2019). It is observed that, since
most organizations use some technique of SWOT (Strength, Weakness, Opportunity, Threat)
analysis, this situation acts as the original point of identifying critical issues since it is part of
planning cycle. SWOT analysis has been used since early 1960s as tool that helps organizations
and business entities to identify and address critical issues (Sirois, 2017). However, this can be
done by basing on the opportunities as well as their strengths in operation (Moretti, 2019).
Besides, the business is characterized by its strength in order to create advantage of operation
over others. In the business context, the business entity is put in place of disadvantage in relation
to other organization when it possesses some weaknesses. Therefore, issues in the business are
observed as actual or risk within the company’s performances (Moretti, 2019). In order to
achieve the targets of the company through using analytical tools, several criteria should be used;
the competition’s performance, expectations of the clients and the performance expectations of
the executives.
Digital communication technologies
Artificial intelligence (such as electronic calculators, tabs among others); are a kind
of technology that is normally termed as ‘evolving technology’ that is serviced with systems of

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computers with things that are allied with the intelligence of humans (Insights Team, 2018). In
2029, in the current circulating propaganda, is predicted that there will be machines that have
‘artificial intelligence’ (Patel et al, 2010). These machines will have to take on the activities
performed by human beings mainly in the auditing department since their work seems perfect
(Fay & Montague, 2015). Basing on the article of Elon Musk, ‘ with artificial intelligence, we
are summoning the demon’, it may be estimated that due to lacking knowledge on terms like
‘intuition’ and ‘thought’, that’s why people try emulating (Insights Team, 2018). Artificial
intelligence has led to what is known, as ‘predictive analytics’ in auditing that requires the use of
data analysis techniques that are advanced (Fay & Montague, 2015).
Robotic Process Automation; People often confuse Artificial intelligence with Robotic
Process Automation though the latter involves the use of robots as software ‘workers’ which are
more sophisticated ‘ Excel spreadsheet macros’ than the Artificial intelligence (Insights Team,
2018). In most cases, Robotic Process Automation is applied where there is need to transfer
output of one ‘financial process’ to another or even several information sources require to be
consulted (Sirois,2017). Because to this, the technology is also known as ‘swivel chair
automation’, forming an image of employees ‘swiveling their chair around as they consult
multiple systems and re-key and check information ( Nasha & Kamil, 2017).
Data analytics; Some companies have abruptly changed from the local sampling
techniques to use of data analytics by using computers and other computer-related packages in
testing their transactions (Moretti, 2019). Auditors are free to use population transactions while
analyzing their tests by use of data analytics. Data analytics also, enables auditors to analyze
historical data effectively ( Nasha & Kamil, 2017). Auditors are free to analyze all the
population of transactions processed other than using a sample of transactions data to test few

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activities. This allows us to point out ‘anomalies’ that expose the business to a very high risk
(Insights Team, 2018). The data analytics system is a very better technology system the gives
the auditing department the potential to generate high quality audit.
Conclusion
Conclusively, technology auditing is advancing in the accounting and auditing
departments of several organizations. Many human auditors are likely to be replaced by these
technologies though there are some activities that require human auditing to have the most
significant results. As a senior auditor, I advice some small firms to hold-on to use technology
auditing since its expensive to employ and at time wrong information may be displayed.
However, the larger firms are advised to use technologies in auditing since its very hard for one
individual to carry on the auditing process in such a big organization.

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References
Brennan,B., Baccala, M. & Flynn, M. 2017. Artificial Intelligence Comes to Financial
Statement Audits. Retrieved from: https://www.cfo.com/auditing/2017/02/artificial-intelligence-
audits/
Fay, R & Montague, N, R., 2015. Avoid 5 common judgment biases that can affect accounting
and auditing decisions. Retrieved from: https://www.micpa.org/news/2015/03/02/avoid-5-
common-judgment-biases-that-can-affect-accounting-and-auditing-decisions
FEI Daily Staff. 2017. What Impact Will AI Have on the Audit? Retrieved
from:https://daily.financialexecutives.org/impact-will-ai-audit/
Harris, B, S., 2017.Technology and the Audit of Today and Tomorrow. Retrieved from:
https://pcaobus.org/News/Speech/Pages/Harris-statement-PCAOB-AAA-4-20-17.aspx
Insights Team. 2018.Three Technologies That Will Change The Face Of Auditing. Retrieved
from: https://www.forbes.com/sites/insights-kpmg/2018/07/16/three-technologies-that-will-
change-the-face-of-auditing/#7418b76e7544
Moretti, L, R. 2019. The Future of Audit Embracing technology and change. Retrieved from:
https://www.accountingtoday.com/opinion/the-future-of-audit-embracing-technology-and-
change
Nasha, M, N, & Kamil, O,. 2017.The Impact of Information Technology on the Auditing
Profession. International Review of Management and Business Research. Retrieved from:
http://www.irmbrjournal.com/papers/1513071494.pdf

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Omoteso, K. 2012. The application of artificial intelligence in auditing: Looking back to the
future. Retrieved from” https://www.sciencedirect.com/science/article/pii/S095741741200111X
Patel, A. Omoteso, K & Scott, P. 2010. Information and Communications Technology and
Auditing: Current Implications and Future Directions. International journal of Auditing.
Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1628831
Sirois,A.B. 2017. Audit Data Analytics: Opportunities and Tips. Retrieved from:
https://www.ifac.org/global-knowledge-gateway/audit-assurance/discussion/audit-data-analytics-
opportunities-and-tips
The Financial Reporting Council Limited.2017. Audit Quality Thematic Review the Use Of Data
Analytics In The Audit Of Financial Statements. Retrieved from:
https://www.frc.org.uk/getattachment/4fd19a18-1beb-4959-8737-ae2dca80af67/AQTR_Audit-
Data-Analytics-Jan-2017.pdf