Page 242 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
- Inappropriate manual intervention.

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

(CNO DAA.300) Key Steps for Auditors in a Changing Technology Environment
Skepticism: Maintain professional skepticism when reviewing management's risk assessment for new systems.
Impact Understanding: Comprehend the direct and indirect effects of new technology on the entity and its
implications on the auditor's risk assessment.
Transaction Flow: Understand how technologies influence transaction flow, assess the completeness of in-scope
Internal Control over Financial Reporting (ICFR) systems, and design an appropriate audit response.
Management Processes: Evaluate the suitability of management's processes to select, develop, operate, and
maintain technology-related controls, considering the extent of technology usage.

(CNO DAA.320) Next Generation Audit
Definition: Next Generation Audit is a human-led, tech-powered, data-driven approach that redefines traditional
auditing methods through the use of emerging technologies.
Technological Progress: The current era is characterized by rapid technological advancements, including the
development of new digital devices, applications, and tools. Technologies such as 3D printing, augmented reality
(AR), virtual reality (VR), biotechnology, drone auditing (Unmanned Aerial Vehicle), and quantum technology
are transforming various sectors, including auditing.
Audit Transformation: Next Generation Audit leverages these technologies to enhance the efficiency, accuracy,
and comprehensiveness of audit processes. The integration of these technologies into auditing has significant
implications for society, potentially revolutionizing the way audits are conducted and interpreted.
Drone Technology: Using drone technology in the remote locations for stock counts.
Drone Usage: Drones are used in remote locations for stock counts, leveraging their payload capacity to carry
sensors and cameras.
Asset Examination: Drones can photograph and physically examine large quantities of fixed assets and
inventory, enhancing the accuracy of counts.
Data Integration: Drone-captured audit information can be combined with other data sources such as QR code
readers, handheld bar scanners, and manual counts. This integration optimizes the quality of audit deliverables,
consolidates audit information, and enhances execution speed.
Data Completeness: The use of drones and data integration ensures the correctness and completeness of audit
data.
Augmented reality:
AR Definition: Augmented reality (AR) is a technology that overlays digital elements onto the real-world
environment.
AR Application: A well-known example of AR is the mobile game Pokémon Go, where players interact with
digital creatures in physical locations.
Virtual reality:
VR Definition: Virtual reality (VR) is a technology that replaces the real world with a digitally simulated
environment.
VR Experience: VR uses custom equipment like headsets to simulate experiences, such as exploring a virtual
world or simulating activities like flying or skydiving.
Examples of augmented and virtual reality?
Architecture and Engineering: AR and VR technologies enable architects and engineers to visualize building
plans before construction, enhancing design accuracy and efficiency.

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