Page 240 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
- Configuration & Operation: Poorly set up or malfunctioning AI can lead to errors or harm, especially in
critical areas like health.
Blockchain
Blockchain Overview
- Decentralized and encrypted ledger.
- Transactions are validated and then replicated to participants.
- Sequential blocks prevent unauthorized modifications.
- Wide-ranging industrial benefits recognized.
- Examples: Bitcoin, money transfer, and smart contracts.

Audit Implications
- Importance of governance and security around transactions.
- Core security based on cryptography, but has risks.
- Possible issues: insecure APIs, data privacy, and data confidentiality.
- Weak application development protocols a concern.
- Auditors must ensure compliance with data privacy laws, especially across borders.

Risks of Blockchain Technology
- Strengths can be vulnerabilities.
- Irreversible transactions and key-based data access bolster security, but necessitate robust protocols.
- Threats: getting locked out, cyber-attacks, data breaches.
- Auditors must check data management and regulatory compliance.
- Constant adaptation needed as blockchain regulations evolve.
NFT (Non-Fungible Token)
Definition:
NFTs are unique digital tokens that cannot be exchanged on a one-for-one basis like cryptocurrencies. They
represent ownership of unique items, from photos and videos to artwork and collectibles. These digital assets are
secured by blockchain, ensuring their uniqueness and authenticity.

Key Features:
- Digital Asset: Represents online collectibles such as art, music, and games. Authenticated by blockchain
technology.
- Unique: Cannot be forged or manipulated.
- Exchange: Transactions for NFTs are done using cryptocurrencies on specialized platforms.

Challenges:
NFTs face issues like copyright disputes, security vulnerabilities, and a limited market. Moreover, the audit
process for NFTs includes code reviews to ensure token safety, contract validity, and protection against potential
cyber threats.
Robotic Process Automation
Definition:
RPA is a software technology that mimics human actions in interacting with digital systems, enhancing process
efficiency, customer experience, and control effectiveness. Unlike humans, RPA bots can work continuously
with increased speed, reliability, and accuracy.

Audit Implications:
- Understanding RPA Processes: Auditors must grasp RPA operations like data extraction, aggregation, and
cleansing to conduct audits effectively.

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