Reference no: EM132376293
Assignment : Technology in Audit Engagements
Background:
You are employed in a small audit firm, as a senior auditor. One of your colleagues, Savannah (an intermediate in your firm who recently helped you to complete preliminary analytical procedures for a client), has contacted you with some concerns: she has heard from a family friend that auditors will become redundant in a few years due to rapid advancements in audit technology.
She wants to know how advancements in technology will affect her role in the audit team including the way she communicates with other staff, and hpw your firm will complete analytical procedures in the future. She has asked you for your personal views on whether auditors will be replaced by automated technology within the foreseeable future.
The firm you work for, like many small firms, currently prepares audit workpapers predominantly in Excel. The firm has an Excel file that includes a standard audit program and workpiper templates for recommended audit procedures. This file is used as the basis for all of the firm's audit engagements and is customised for each engagement (e.g. sheets are added and deleted as appropriate).
The first sheet in the file is titled "Matters for partner attention"; you use this to note concerns that are identified during audits. In addition to communicating via "Matters for partner attention", you have face-to-face meetings with the audit partner and other members of the audit team as necessary. Despite all staff being based in the same physical office, email communication is the norm in your firm. Phone calls also occur but are infrequent and are principally used when staff are off-site (e.g. when visiting a client),
Your task:
Your task is to research recent developments in audit technology and prepare an email response to your colleague which covers the points below:
• Briefly explain 3 key technologies that are affecting (or threatening to affect) the audit profession (for example; Audit Support Systems, Blockchaln technology, etc.).
• Discuss the "disruptive" potential of these technologies (e.g. how will they change the way auditors operate). As part of your discussion, identify how the technologies can:
- affect communication within the audit team,
- support auditor's analytical procedures at various stages in the audit, and
- reduce the influence of auditor bias in decision-making.
• Comment on whether (and to what extent) you feel these technologies have the potential to replace human auditors.
• Comment on which of these technologies you feel would be most appropriate for your firm to adopt, and why.
Along with your email, you will provide a rationale. This rationale will present evidence to support the comments you have made in the email, including relevant academic Journal articles, professional publications, and other sources if necessary. You should consider the credibilityof the sources you cite, and acknowledge any significant limitations associated with the sources.
Your submission should include:
A response to your colleague, formatted as an email (approximately 600 words)-
A rationale to support the email (approximately 1000 words). The rational should be in prose format (i.e. formal essay or report structure is not required). Academic references must be included to support comments made.