Respond to the following statements. Identify connections between events that signal larger trends in the field:

1. I have read an article called “Not All PCAOB Inspections Are Created Equal” and this article relates to the section of the class about ethical decision making. The PCAOB created an inspection process in 2004 and now almost every auditing firm has adopted the process. So, the process is broken up into two different parts. The first part deals with the number of audits inspected and identifies inconsistencies with current auditing standards. However, not all the inspections are selected because it is on which one it more of the riskier option. The second part of the process inspects the auditing firm’s systems of quality control. So, this deals with things such as policies and retention. Then, if there is a finding, they keep it to themselves unless the firm fails to remediate identified deficiencies within one year. Since the process has been put into place the number of quality control reports are 244. The article also talked about comparisons of auditing firms and some findings of the audit reports as well. The big thing this article has looked at is the comparisons of how the process has worked. It shows that the process has is receiving a high percentage of findings in the inspection. With the higher percentage of inspections being found makes the things being done correctly. It also allows for the people to make a better ethical decision on doing the right or wrong thing. It also makes the auditing process done more efficiently and with fewer issues. So this process allows for better Audit quality and when you have better Audit quality, it allows for the inspections to have limited findings.

2. The article I found interesting for this lesson discussed new technology within auditing, and its opportunities and challenges. A recent report showed accounting firms are spending around $3 billion to $5 billion a year on new technology. This technology will help with auditing of companies, and will be able to process much more data in a short period of time than traditional auditing standards. Where auditors only test a sample of a company’s transactions during an audit, new technologies will be able to test 100% of these transactions, leading to a more in depth look at the company’s financials. With these technologies and programs being able to communicate directly with a corporation’s computer systems, information will become available immediately to auditors and may lead to faster and/or more accurate decisions.Although this new technology will not be able to replace the auditors all together, it may make it easier for less auditors to conduct a single audit. The professional skepticism and judgement of the experienced auditor will always make them a necessity to making decisions about the companies’ financial statements. This current trend in new technology will give auditors the ability to make judgements and decisions after nearly all of a company’s data has been tested, which could lead to a higher level of assertion by the auditor than the currently required reasonable assertion. As technology improves and continues to be used more often within auditing, it will be interesting to see how it changes the profession.

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1 It is true that the provisions of PCAOB in regard to auditing mainly relates to ethics and ethical ... View the full answer