Page 247 - CA Final PARAM Digital Book.

QNO Technological risks New Course – (SM23)
DAA.920 TITANIUM CNO -- DAA.280
Emerging technologies can bring great benefits, but they also come with a varied set of substantial risks.
Give some examples of technology risks of digital system and the control considerations to consider while
assessing technology risk
Answer Some examples of technology risks where auditors should test the appropriate controls for relying on the
digital systems (Similar to concept of IT Risk)

1. Access Control and Authorization:
- The possibility of information technology personnel gaining access privileges beyond those necessary
to perform their assigned duties, leading to insufficient segregation of duties.
- Unauthorized access to data that might result in destruction of data or improper changes to data.
- Unauthorized changes to systems or programs.

2. Data Accuracy and Integrity:
- Reliance on systems or programs that are inaccurately processing data, processing inaccurate data,
or both.
- Unauthorized access to data that might result in destruction of data or improper changes to data,
including the recording of unauthorized or non-existent transactions or inaccurate recording of
transactions (specific risks might arise when multiple users access a common database).
- Unauthorized or erroneous changes to data in master files.
- Inappropriate manual intervention.

3. Data Availability:
- Potential loss of data or inability to access data as required.

4. System Maintenance and Updates:
- Failure to make necessary or appropriate changes to systems or programs.
- Unauthorized or erroneous changes to systems or programs.
- Inappropriate manual intervention.

5. Service Providers and External Threats:
- Risks introduced when using third-party service providers.
- Cybersecurity risks.

QNO Emerging technologies New Course – (SM23)
DAA.940 TITANIUM CNO -- DAA.320

Give example of emerging technologies available for Next Generation Audit along with the risks associated
with it.
Answer Drone Technology: Using drone technology in the remote locations for stock counts. Drones have great
payload capacity for carrying sensors and cameras, thus they can photograph and physically examine the
count of large quantities of fixed assets and inventory.

Augmented reality: The technology allows users to view the real-world environment with augmented
(added) elements, generated by digital devices.

Virtual reality: VR goes a step forward and replaces the real world entirely with a simulated environment,
created through digitally generated images, sounds, and even touch and smell. Using special equipment,
such as a custom headset, the user can explore a simulated world or simulate experiences such as flying or
skydiving.

Metaverse: The metaverse is the emerging 3-D digital space that uses virtual reality, augmented reality, and
other advanced internet technology to allow people to have lifelike personal and business experiences
online. It represents a convergence of digital technology to combine and extend the reach and use of
Cryptocurrency, Artificial Intelligence (AI), Augmented Reality (AR) and Virtual Reality (VR)
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