From relying on only human decision making. I do think this is a little concerning as automated
systems are fraught with error or possible tampering (potential fraud). But I do think there are
many of these technologies that have greatly assisted with the fields of auditing and accounting. I
do not think they are all bad necessarily but we as a society need to keep in mind the limitations of
computers. And to not solely rely on these technologies. It is very important to ensure there are
proper checks and balances in place to avoid error or fraud.
Discusses many different new and emerging trends in auditing and accounting. The trends include
changes in auditing related to cryptocurrencies, less complex entities, Covid-19, and internal
auditing. The most concerning trend to me is the changes in internal auditing shifting more and
more towards artificial intelligence. "It believes artificial intelligence and advanced analytics tools
will become an integral part of internal audits for large and smaller organizations in all sectors."
(Murphy, 2022) Although automation can be a great movement forward towards lightening the
workload in an effective manner, technology isn't perfect so if there are not proper controls in place
then this could spell trouble for many companies.
The article I chose is from the CPA Journal entitled "Failure Study: A Needed Addition to the
Accounting Toolkit". I selected this article because I think it touches on two elements of this week's
discussion - it is both recognizing the need for new tools for auditors to use and is calling for these
resources due to the historic failures of the profession.
The article posits that the trend of perceived failures of the auditing profession, listing global
failures to detect corporate issues in audited firms, and the rise in public perception that auditors
were not performing their duties to protect investors and the overall economy. The article goes on
to discuss Failure Studies as they are performed in other professions. In healthcare and airline
industries, critical failures in the operating room or of a plane are investigated in detail to assess the
cause of the failure and institute new policies or practices to prevent the failure from occurring in
the future. In the auditing profession, the changes to the processes are often driven by regulation
or law with limited internal incentives to pursue substantial changes to the audit process.
I do agree with portions of the article. Through this course, it was apparent that much of the audit
language and process is driven by regulatory standards that prescribe process and steps. This raises
the occasional thought that this is a "box checking" exercise, where so long as the steps are
performed in the correct sequence to the expected degree, the auditor can step away from the
engagement safely without concern over the future outcome of the entity being audited.
To change this, the article speaks of the need for internal motivation of the auditing profession to
break from the incentives pushing against more accountability and seek evaluation of auditor
performance based on a rigorous failure study. Driving change from the profession and using the
process of gathering, collecting, and utilizing data to inform federal policy to see greater levels of
transparency and accountability in the auditing process. I think this is a noble objective, but in
practice, difficult to obtain.
References
Jim Peterson, J. D. (2019, April 5). Failure study. The CPA Journal. Retrieved October 29, 2022, from
https://www.cpajournal.com/2019/03/29/failure-study/
Murphy, A. (2022, April 26). What New Trends in Auditing and Accountancy Should Students Know
About? Masterstudies.com. https://www.masterstudies.com/news/What-New-Trends-in-Auditing-
and-Accountancy-Should-Students-Know-About-4203/
Hooshangi, S., & Sibdari, S. (2022). Human-Machine Hybrid Decision Making with Applications in
Auditing. In Proceedings of the 55th Hawaii International Conference on System Sciences. Retrieved
from https://scholarspace.manoa.hawaii.edu/server/api/core/bitstreams/5b19c248-7d4c-4d56-
8f9b-2c7523945bcb/content
