Page 101 - CA Inter Audit PARAM

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(iv) Automated: A task or activity that is routinely performed by a computer system and does not
require manual effort.
(v) Direct Data Change: A backend modification that is made directly to data that is stored in a database
bypassing business rules built-in to a business application software.

QNO Definition of Multiple Terms (Third) #Unique Old Course -- (M21M)
AAE.70
With respect to audit in an automated environment, explain the following: (any four)
(i) Applications
(ii) Control Deficiency

(iii) Data Processing
(iv) Enterprise Resource Planning
(v) Software
Answer (i) Applications: These are computer software programs that provide a medium for recording, storage
and retrieval of business operations or transactions in electronic format.
(ii) Control Deficiency: It Exists when an internal control is either missing or not operating effectively
to prevent or detect a misstatement in a timely manner by management.
(iii) Data Processing: It Refers to the systematic recording, storage, retrieval, modification and
transformation of electronic data using information systems.
(iv) Enterprise Resource Planning: A type of business application software that provides an integrated
platform to automate multiple interrelated business processes and operations.
(v) Software: A computer program or a collection of computer programs that provides an interface to
a user for performing a specific activity, task, operation or transaction in electronic form through a
computer or information system.

QNO-- Use of Digital Technology in Conduct of Audit New Course – (S24E)
AAE.80 Bhaskar CNO – AAE.270

Z and Associates are the auditors of Realton Ltd., an export oriented unit, which specializes in manufacturing
oil extraction plants. Since many complex processes are involved, they are digitizing their operations. They
are restructuring their business models which are driven by technology. Since most of the operations of the
company are automated, Z and Associates are planning to do Digital Audit. Explain the use of digital
technology in the conduct of an audit.
Answer Use of Digital Technology in the conduct of an audit: Entities are embracing digitization as part of their
operations to keep pace with changing times. New technologies are helping companies revamp their
operations and rethink the way business is conducted. Companies are restructuring their business models
driven by technology. Automation is key to digitization.

In such a business environment, use of digital technology is being made by auditors right from planning to
expression of final opinion.

• Auditors are making use of artificial intelligence, data analytics and other latest technologies to help
understand business processes in a better way.
• By using such tools, auditors can conduct audits in a better way and devote more attention to areas
requiring greater focus.
• Digital audits are helping auditors to better identify risks making use of technology.

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