The Auditing Profession Is Facing Unique Technical Challenges

question 12

Essay

The auditing profession is facing unique technical challenges. These can be summarised briefly as:
-The rise of Internet based retailers and service providers with diversified international operations.
-The siting of key aspects of Internet based retailing operations in low tax jurisdictions using transfer pricing to move funds out of high tax areas into low tax jurisdictions or by carrying out actual trade in one country and invoicing from another, low tax, one - thus claiming that they are actually trading from the low tax jurisdiction even though all they have there is an office and computer invoicing system.
-The increasing use of blockchain and cryptocurrencies, principally Bitcoin.
-The question of going concern relating to high technology businesses developing specialised software applications.
Required:
a) How are these types of development likely to affect the auditing profession of the future?
b) How will this affect the skills required of individual auditors?

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Definitions:

Potassium Ion

A positively charged ion (K+) essential for various biological processes, including nerve transmission and muscle contraction.

Simple Diffusion

The movement of molecules from an area of higher concentration to an area of lower concentration without the need for energy input or assistance of membrane proteins.

Cellular Membrane

The cellular membrane, or plasma membrane, is the biological membrane that separates the interior of all cells from the outside environment, controlling the movement of substances in and out of cells.

Exocytosis

The active transport of materials out of the cell by fusion of cytoplasmic vesicles with the plasma membrane. Compare with endocytosis.