ACC621: Analyzing Technology's Influence on Audit Practice

This report addresses the impact of technology on audit engagements, focusing on the concerns of an intermediate auditor regarding technological advancements. It begins with a draft email explaining the emergence of technology in auditing, including artificial intelligence, data analytics, and robotic process automation. The report explores the disruptive potential of these technologies, emphasizing their effects on audit communication, risk assessment, and decision-making. It argues that data analytics is the most appropriate technology for the firm to adopt, highlighting its advantages over traditional auditing methods. The rationale section further elaborates on how information systems enhance audit practices, enabling more precise and efficient task performance. It discusses the benefits of cloud storage, cloud computing, and big data in providing auditors with greater insights and the ability to examine a larger percentage of transactions. The report concludes that while technology is transforming auditing, human auditors remain essential for maintaining stakeholder relationships and making informed decisions. The provided solution is a past paper and is available on Desklib.

Running Head: ISSUES IN AUDITING PRACTICE
ISSUES IN AUDITING PRACTICE
Name of the Student
Name of the University
Author Note

1ISSUES IN AUDITING PRACTICE
Table of Contents
Draft of Email............................................................................................................................2
Rationale....................................................................................................................................4
Reference....................................................................................................................................7

2ISSUES IN AUDITING PRACTICE
Draft of Email
To- Savannah
From- xyz (Senior Auditor)
CC-
Date- September 4, 2019
Subject- Technological development in Audit
This mail is drafted with the intention of explaining the emergence and development of the
technology in audit. The digitalization is not the new concept. It is from early year 2000,
organizations are using the technology for gaining unprecedented operational efficiency
levels and therefore, improving the technology. However, digitalization, over past few years
has gained tremendous popularity. The organizations are being revolutionized, across the
sectors by digital transformational bug. Technology changes the way people does their work.
The drivers that are responsible for these transformations is the result of various factors, some
of which are changes are impacting the products as well as the way of their consumption,
increasing innovations in space of the technology, increased data availability and availability
of the low cost of the devices and therefore technology accessibility of the technology to the
wide ranges of the individuals.
There are three major technologies, which are affecting or threatening for affecting the
professions of audit, which are affecting the professions of auditing are artificial intelligence,
data analytics and robotic process automation. The technology of artificial intelligence is
defined as the undertakings tasks of machines that require certain kind of intelligence, which
refers to the things for instance knowing, sensing, learning, creating, reasoning, generating,
understanding and achieving the goals of the language. It is highly useful for the peoples as it

3ISSUES IN AUDITING PRACTICE
helps in enabling analysis of the entire populations of the data in order for identifying the
exceptions or the patterns. In addition, data analytics is the useful tool for making the analysis
of past in more insightful way. It helps in analyzing all the processed transactions with the
help of identifying anomalies as well as drilling down the items, which shows great potential
of risks. Lastly, robotic process automation is the software, which can be programmed easily
or it can be instructed by the end users for performing the repeatable, high volume, tasks that
are routine based in the world of today, under which various multiple systems that are
integrated are commonplace.
There is disruptive potential of these technologies. The rapid growth of the changes in the
technologies is disrupting traditional procedures of auditing including the professions of
auditing. The emergence of the latest technologies is affecting communication of
engagements of audit. The instance of this is even there is increasing accessibility of the data
by the data analytics but still there s requirement of intervention of human to filter data and
effectively communicate and advice clients. The technology also helps in making comparison
of different sets of financial and operational information to identify existence of any type of
unusual transactions or any events. These technologies provides great amount of help to
assess risks, obtain assurances and give review of the financial analytics. Moreover,
technologies disruptive potential helps to reduce any form of the bias, while making any
decisions that helps in reflecting objective data in comparison to making the untested
assumptions.
All the technologies used for auditing are not able as well as having no potential for replacing
human auditors because auditors are someone who serves as liaisons in between investors
and stakeholder’s relationships as well as confidence that they are having in each other.

4ISSUES IN AUDITING PRACTICE
The most appropriate technologies that firm can adopt is data analytics because in current
scenario company uses traditional auditing approaches that is by preparing paper of audit
predominantly in Excel file by editing or deleting the data and file. Template is used by the
firm in the firm and edit is done accordingly, if in case there is audit engagement of firm.
Therefore, in this scenario, firm should be using data analytics. This technology would
provide great help in comparison with doing auditing through traditional system.
I hope this mail would be of great help for understanding the various aspects of the recent
technological developments.
Regards,
ABC Company
Rationale
The practice of the audit, when combined with system of information then audit is
enhanced that allows detecting the risks rather than traditional method of using manual audits
methods for completing audit procedure. It has the tremendous impact in the industry of
accounting and finance. Hence, information system plays vital role in supporting auditors’
judgments on information quality, which is processed by computer system (Hall 2015). Now,
the professionals of accounting uses technology for performing their tasks that enables them
to do the tasks in much way as well as with the high level of precision. The advent of the
cloud storage as well as cloud computing is opening up the new possibilities for the
collection as well as analysis of the data on the previously unimaginable scale. The
advancement of the technology is drastically changing the business operations of day-to-day
as well as transforming the business model of the firm (Price et al. 2015). The role of CFO of
the company is no longer limited for having oversight of the finance as well as preparation of
the historic accounts rather technology is allowing for accessing to the vast amount of the

5ISSUES IN AUDITING PRACTICE
data. If it is being analyzed appropriately then it is able to offer extraordinary view of
organization that allows CFO for playing the central role in execution as well as advancement
of the strategy. If the auditor goes beyond confines of the data of the company then it helps in
allowing the auditors for collecting as well as analyzing the broader data sets of the industry,
which were inaccessible previously. It helps in enabling the auditors for identifying better
outliers of information as well as helps in increasing the ability for generating the insights of
the business as well as focuses on the business and the risks of the financial reporting. The
advancement of the technology impacts significantly the audit as well as audit professionals’
future. Utilization of the emerging technologies helps in increasing the audit value to the
stakeholders by providing greater and deeper insights into as well as foresights about the
operations of the organizations. The uses of the technology allows the auditors the capacity
for examining cent percent of the transactions of the clients as well as sorting the entire
populations of the transactions for identifying any kind of anomalies to make it easier for
focusing in on the areas of the potential concern and drilling down on those particular items,
which is exposed for having high level of risks (Senft, Gallegos and Davis 2016). The big
data is having the potential for providing the auditors with the greater awareness of the
situations as well as predictive indictors of the internal and the external environment of the
organizations. It can be done by the help of better track and analyzing the risks and trends as
well as benchmarks the organization that is against setting of the data, which are organized by
the industry, sizes, geography as well as other factors. This results into allowing the auditors
for making the decisions that are more informed and the assessment that are done throughout
the process of audit as well as increases the audit value for the investors and the organizations
(Han, Choi and Song 2014).
The disruptive technologies such as artificial intelligence, data analytics as well as
robotic process automation has made greater effort towards reshaping of existing business

6ISSUES IN AUDITING PRACTICE
models and facilitating emerging new one, under which mundane and repetitive type of the
tasks are getting less important because of emerging high levels of the skills (Vasarhelyi and
Romero 2014).
The emergence of the new technologies day-by-day would helps auditors for
determining data and locating the risks. However, it is auditor who takes decisions based on
data provided by technologies. Auditors are now shifting more time in focusing the risks
involved and counter responses to risks. Therefore, it is just impossible for imagining use of
auditing technologies without human (Kokina and Davenport 2017).
The approaches of the auditing practice that is traditional is consists of performing
functions of audit based on the identification and reporting of significant risks distortions.
The development of the technology of auditing has brought greater scope of professions of
auditing through simplification of the complex calculations, hectic work and work load. The
advancement of auditing technology has resulted into completely changing of the scenario of
professions of auditing. This has allowed the auditors to control the risks involved and
achieving higher level of the reliability by reduction of time and costs involved in auditing.
In the case company, the traditional practice of auditing has brought number of risks. It is
because in traditional system, engagements of the audits are performed with the help of
adding or by deleting sheet of excel file. The other problem involved with this system is the
problem of communication in office that includes having no frequent mails and phone calls
(Chiu, Liu and Vasarhelyi 2014). If all these limitations exist for long-term then it would be
difficult for the case company to survive in long-term. Therefore, the audit firm should be
adopting the data analytics techniques. It is because, this method would be of great help to the
smaller firm of audit to make audit plan and procedures in the identification of the patterns,
fluctuations and correlations from models. This would be helpful as it would reduce the cost

7ISSUES IN AUDITING PRACTICE
of the firm and audit work would be provided in less time with more effective, reliable as
well as quality information (B. Curtis and A. Payne 2014).
Reference
B. Curtis, M. and A. Payne, E., 2014. Modeling voluntary CAAT utilization decisions in
auditing. Managerial Auditing Journal, 29(4), pp.304-326.
Chiu, V., Liu, Q. and Vasarhelyi, M.A., 2014. The development and intellectual structure of
continuous auditing research. Journal of accounting literature, 33(1-2), pp.37-57.
Hall, J.A., 2015. Information technology auditing. Cengage Learning.
Han, K.J., Choi, B.Y. and Song, S. eds., 2014. High performance cloud auditing and
applications. Springer.
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.
Price, K.I., Giubileo, J.P. and Woolf, M.C., CA Inc, 2015. Auditing system and method. U.S.
Patent 9,202,183.
Senft, S., Gallegos, F. and Davis, A., 2016. Information technology control and audit.
Auerbach publications.
Vasarhelyi, M. and Romero, S., 2014. Technology in audit engagements: A case
study. Managerial Auditing Journal, 29(4), pp.350-365.