Auditing is an important aspect of any business in today’s time. It is very important to get your accounts audited for the smooth running of your business. Auditing means effective examination of the overall books of accounts of any organisation, to check whether the account and books are reflecting accurate and impartial view of the business. With changes in time and technology, the method and the manner of conducting such audit programs have also changes. The modern day auditing problems are way different then what we have a decade back. It is important that we are able to deal with the effective inherent problems of auditing, to make sure that the accounts of a company are free from any discrepancy and we able to comment on the overall viability of the books and accounts of any company. There are various inherent risks and problems that are associated from auditing in the traditional sense, but with advent of technology and growth of mankind, there has been a huge change in the kind of problems one faces in such kind of auditing functions. With time and advent there have been several changes in the method of auditing , and how we do it. The auditors are responsible for doing their work in a manner that they are able to portray accurate and impartial understanding of the entire system of accounts and financial information. Previously auditing was a very tedious job, that included a lot of manual work an d a lot of tedious work went into collection of data and segregation of data, and putting data in a manner that it can be easily managed and audited. The challenges inhered with traditional system of suiting is very much relevant if we go through the overall work done by the auditors in previous days. Three has been several books and journals that have well depicted the advent and growth of audit since ages. There are three journals that are very much related to the growth and the development in the field of audit, namely.
This book written by Michael power, is a systematic investigation of audit as an attitude of community association and controller. The author has critically examined the means, process and problems with auditing, and how we solve the same effectively. There are imperative inquiries raised about the efficiency of processes of audit, and also proposes ways how we can evaluate the same and contrast the theories and practices to trust.(Power, M. (1997)
The overall research done by the investigation board of The Institute of Chartered Accountants of Scotland, on the ethical standards of accountants. In case of auditing , it is very important that the auditor maintains the relevant code of ethics. It explores various ways in which the process of ethical decision making can affect the auditors, and how they can take effective steps to Condon such situations. It also provides some remedies to the auditor.(Hillier, C., & Babington, J. (2004)
The auditing crunch, published by the Centre of Globs Accounting. It stimulates and works for global accounting issues, and how one can fight for it..(Sitka, P., Filling, S., & Lie, P. (2009).
When we do a comprehensive study of all the three journal articles, we found that ,the overall challenges and opportunities in the auditing profession can be divided into three main categories-(Lieu, F. L. (1996).
We all know that in today’s time, technology plays a major part in our lives. It has a huge impact on what we do and how we do and same goes for auditing also. Technology regulates various factors, like the tools that we use, the roles that we play, the overall potentially what we audit. Now the challenge faced by today’s skilled professional is to understand how they can integrate the outburst of such technological growth with their business, and how they can bring the necessary changes that they want to bring, with the use of such technology. It has both its pros and cons, if on one hand; it will make the work of auditor faster paced, quick and efficient. It will also increase the overall cost of auditing, as the companies will need such individuals who are able to handle these technological complexities effectively.(Yang, K., & Jiao, X. (2012).
Another major problem of modern day auditing is to ascertain which people to rely on and which not. This is the second biggest challenge of the auditing profession and one of the major one of the modern day auditing. There is abroad recognition that there is a change revolution in the society and that is affecting the business all round. There is a lot of political influence on how to operate the business in today’s time. The overall trust between society and people is not improving and thus what is needed that effective leadership be the need of the hour. This is arguably the biggest challenge facing all the industries. “Responsive and Responsible Leadership” is the hottest topic of the decade.
The third topic of debate is shifting of geo political landscape, the changing relations between various countries, with the elections and appointments and removals, also brings a change in the relationship that these countries have each other. All these changing relations and shift in the geo political landscapes, brings a period of uncertainty and change. The challenges as per being a professional, is to make the clients aware about the changing situations, and helping them to cope with such uncertainties, and to guide them effectively through all these risks and opportunities, and also how to remain flexible and fragile in the changing situations.(Lyme, A., & Debrecen, R. (2003)
One of the other major challenges faced is the practice of using fraudulent means in auditing and not being able to reflect the factual and reasonable opinion of the financial documents and information. Lately various corporate collapses have occurred because of such practices. These practices hampers the overall editing done and also destroys the work quality. It is important for the auditor to practice doing quality work so that the end users are not affected by the same. The auditors are required to do their work diligently so that people can put resilience on them .
There are various other problems that are associated with the modern day auditing, and how we can use technology in changing and bring a revolution in this field is something to watch out for. There are various ways in which the auditors can solve these problems, that are integrated more on the global level than in the inherent level. There are many ways in which we can solve these problems, but one of the most interesting one is that of artificial intelligence. It is one of the rapid growing technology in today’s world and it is important that the companies become aware about the same and use the same for their development and growth. It will be helpful by saving a lot of cost and also time.
Artificial intelligence is defined as the overall capacity of the machines to reflect intelligence and bring it with promise and concern. As the machines and tools are made to think feel and behave like living beings, it has led to a series of changes. Now what we need to see is that this concept of artificial intelligence be useful in solving the various modern day auditing problems that we face from time to time.(Turner, R. K. (2006).
Artificial intelligence speaks of a time when the auditing systems will be able to audit 100% of the financial transactions. The modern day visionaries, advocate a day when with the help of artificial intelligence, auditing will no longer a monotonous jobs, requiring hundreds of professionals to work for long stretch of hours, even though still not able to eliminate the various inherent risks that is associated with all types of audit, but it will be a continuous and a real time process where with the help of these machines with artificial intelligence we will be able to audit 100% of our documents eliminating any kind of risks that is associated with auditing of financial statements. But what really matters is to see that whether it’s an effective tool that will keep the human value intact in the heart of auditing, providing auditors with better tools to conduct their audit in an efficient manner, or whether it’s just a modern wave, that all companies wants to stick to, in times to come. After detail analysis we found the following details-
The first and foremost requisite of auditing is to collect data. The collection of requisite data is the heart of any auditing profession. It is the responsibility of the auditors to acquire raw data, sooner than they have the ability to review it.. The auditors also need to efficiently regulate the data that is collected from external sources, to understand the overall risk. To incorporate this idea of artificial intelligence into their system of data collection, the auditor needs to be aware of how these data are structured, and how they be at variance from industry to industry, and how we can incorporate the same.. To incorporate the use of Artificial intelligence in our data system, we need to not only supply it with data requirements but also code it with efficient decision making capabilities.(Spangler, W. E., May, J. H., & Vargas, L. G. (1999)
Another concept in this field is that of block chain, which is of the major tools in the field of artificial intelligence, now how do we make use of efficient block chain models is the concept that we need a clarity on. “Artificial intelligence Block Chain is a proprietary block chain solution that provides enterprise-friendly tools that can enhance any existing architecture”(“Block chains for Artificial Intelligence – The BigchainDB Blog”, 2017) It is a very efficient technology that helps in providing a user friendly energy efficient digital ledger that will eventually help in maintaining the required amount of immunity and also channelizing the work effectively through these ledgers.(Pilkington, M. (2015) It is one of the most growing technology and very helpful in today’s time. It has made auditing a better process than what it traditionally was.(Baldwin, A. A., Brown, C. E., & Tinkle, B. S. (2006)
Compared to humans, machines are most fast and saves a lot of time and energy, the can help in better collection and streamlining of a data. The new technology that has been developed after a lot of research will be helpful in the long run to bring the development that the company industry needs as a whole. They will help in streamlining the various types of data acquisition challenges that are faced by the auditor. It is minimize the burden of analysing large amount of data, properly segregating them and then pulling out the most effective and useful information from the same and dividing the same into proper formats, so the only thing that humans needs to do is to analyse that data and audit it. The auditor has enough time to spend on the judgemental aspect of audit. These machines are very much helpful in processing large amount of data efficiently, they review what needs to checked in an audit, and also recognise any kind of anomalies in the data. It can effectively discover a lot of things, like an unusual spike of data from a geographical region, some exceptional set of expenses that are recorded by an individual etc. But what the auditor is required to do, the same task can’t be performed by the Artificial intelligence technology. The clients place their trust on the auditor to properly audit their books of account, and provide them the required judgement on the overall financial position of the organisation. Artificial intelligence can only help in collecting and integrating segregating the data, but they cannot place any judgement on the viability of the same, that is the work of the auditor and he needs to do that.. (Russell, S., Nerving, P., & Intelligence, A. (1995)
As we are introducing new technology, it is our overall responsibility to make sure that such changes can be incorporated into prime time use. The concept of artificial intelligence is based on the fact that it will do only what we tell it to do, nothing more than that, nothing less, so it is our responsibility to be clear about the associated risks. By clearly defining the terms of engagement between the numbers researchers, inventers, and auditors to meet them, we can make sure that the technology is put into use, and is not just slogans, but also in practice efficiently and successfully.Vasarhelyi,( M. A. (1988)
Faster auditing will eventually be helpful, since the auditors are able to audit 100% of the transactions, they can place their reliance and their judgement in a better manner. It can help the auditor to move from the concept of traditional audit sampling, to audit of the full picture that is major progress in the overall concept of auditing.(Wongpinunwatana, N., Ferguson, C., & Bowen, P. (2000) This concept is most helpful, where there is lot of manual activities, when we make use of artificial intelligence it will help in bringing the requisite changes as and when needed. The overall process of data extraction, comparison and validation, is great starting point and the use of machine can assist in this process in a great way. It can significantly speed up the process of data digitization, reducing the large amount of time that is spent on these activities.. The overall process of testing and automation of transactions related to payment of cash and judging the overall flow of cash, can be done with the help of artificial intelligence.(Dakin, G. (1993).
Conclusion
The one person who gains the most is the client. The client gains the maximum from all these reforms and technological changes. Because of all these developments, the clients are required to spend very less amount of time and resources comparatively then what it was spending when the system of automation was not there. It has also reduced the cost of automation to large extent. It has also given them a more back up , critical and goal driven stretch old-fashioned. When the outside accountants have extra period to make professional judgement, and check whether the financial statements are showing the true picture or not, there are less chances of errors, and hence that is beneficial to the clients in the long term. With more and more technological development there are many changes that are taking place day and again and we are able to make best use of them ,we would be able to perform our jobs in a way then they were being practiced in the past. If we are able to save our resources we can use the same for long term development in the future. (Hansen, J. V., McDonald, J. B., & Slice, J. D. (1992)
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