1) SHEELPA BHEEKARRY- STUDENT ID:

1913182
2) PRAVESH SINGH RAMCHURN- STUDENT ID:
1913070
3) NADESHBSCBHANDOY
(HONS) ACCOUNTING MINOR:
– STUDENT ID: 1911520BUSINESS INFORMATICS

TO: MR. MOOTOOGANAGEN RAMEN

PREFACE

We are pleased to present our work based on the Evolution/Development (CHOOSE 1 ENTRE SA
2 MOTS LA) of digital economy in audit. We have reviewed its importance, impact and
challenges in Mauritius and globally as well. This assignment includes an overview of digital
economy in relation to auditors, we have made a review of past research on auditing in relation
to digital economy. Additionally, we have elaborated on its importance in Mauritius.

ACKNOWLEDGEMENT

We would like to show our gratitude towards Mr. Mootooganagen Ramen for his
encouragement, guidance and support. We have been able to better explore the work of the
auditor “in reality”; especially in a digital economy. We are thankful to the teacher for giving us
the opportunity to work out on this assignment, since we have been enlightened on the
application of technology in auditing. It has been an enriching experience.

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Table of Contents
Overview of subject matter 3
The development of the digital economy in the audit sector. 3-5

Review of past research (20-25references) in relation to the subject matter 6

Trends and Their Impact on Audit 9
EFFECTS OF DIGITALIZATION ON AUDITORS 12

The importance of Digital Economy in the Mauritian context 17

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Overview of the subject matter

The development of the digital economy in the audit sector.

The digital economy refers to the rapid development of technology around the entire world.
The auditing sector and other concerning financial sectors also have been deeply affected by
the changes in technology. Through the digital economy, new software and business ideas have
come to life such as business analysis, software that can examine a whole sample in less than a
minute and so. In the modern business world, the gold standard of corporate governance is
reliable internal control over financial reporting. Good financial reporting is an indicator of good
corporate governance. Automation processes and artificial intelligence will result in an effective
approach in the performance across all countries and business processes. As we all know that
digital economy refers to various innovative technology on the market the audit should
innovate also. According to ACCA Global ‘Innovation needs to come from the profession, not
the regulator, but someone needs to pull it together for consistency across markets; firms need
to drive it forward.’ [UK]. The firms need to change their approach in the audit sector so that
they can move towards efficiency. The key success factor to move towards a digital economy is
by transforming the audit from the old function into a business partner concept set by the UAE.
For the past five years, the audit profession has changed drastically through the digital
economy. It was due to the perseverance of the accounting firms. Singapore suggested that to
achieve all of these they had to break corporate governance to move from the traditional form
to the digitalized form. Another respondent stated that the audit profession needs to evolve or
else it will die.

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Governments and organizations around the world are investing heavily in new technologies to
be more effective in controlling their functions and processes. In the new digital economy, the
future of audits has changed drastically, that there was a minority like China who stated that
the work of auditors is merely to give assurance to investors about whether the company is
financially stable. The European Union stated that the key objective of an auditor is to provide
key information to providers of capital. As we can note, the opinion of certain countries states
that the auditor’s work is to provide information only about equity, but on the other hand the
roles of auditors have changed through the digital economy. According to Singapore, with the
help of digital technology, there were many questions raised about how it will impact the
professions. When we refer to a digital economy, it’s a set of tools and technology that helps in
doing daily tasks efficiently. The tools help to provide efficient services, but it does not replace
auditors at all. With the help of the digital economy in the audit sector, we can get real-time
information quickly which can lead to a better decision being taken and it will impact the short-
term decision in positive ways. ‘Auditors need to provide insights to enhance the value of audit
and the relevance and attractiveness of the profession

The ways about how the digital economy has shaped the auditing profession are unspeakable,
but there have been some issues also about the changes from a traditional audit and to a more
digitalized audit. The issues are that according to Grant Thornton/ACCA, the same level of audit
is not applicable everywhere and in the future audit may develop at different pace in different
countries. The historical financial statement analysis remains a vital foundation on which to
make investment decisions, but the importance of the audit varies based on whether it is seen
as ‘news' or simply confirmatory by consumers. There will continue to be a need for
independent assurance services where finance providers rely on facts. Assurance capabilities
must be tailored to individual consumer contexts and demands in a versatile and proportionate
way. While innovations developed in developed countries which have broader implementation
in developing countries, they should not be demanded anywhere until fundamental capability is
built and a market for a wider variety of assurance services exist.

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Whatever the operating environment, roundtable participants agreed that a consistent set of
criteria is critical. A stable body of standards fosters awareness and progress of audit efficiency
for countries that are improving their audit capabilities. There is an argument that only
incremental improvements in the usefulness of audits are available in countries with a
developed audit market, which could be out of proportion to the commitment taken to achieve
such improvements.

Although norm continuity is essential for international business, standard setters must also be
able to express the business benefits of improvements. International standard-setters should
therefore take into account the fact that various countries are at different levels of audit
growth, and try to incorporate this in criteria that are intended for businesses of all sizes. Since
minor improvements in audit efficiency can not be worth the extra work taken to catch them,
standard-setters and regulators must express the market benefits of reforms.

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Review of past research (20-25references) in relation to the subject matter

According to KPMG Audit Committee News Impact of digitalization on the audits, profession
states that data analysis can be split into large transactional data and big data analytics. The
standardized automated process will increase the amount of data volume, and this will allow
the auditors to achieve a more efficient and higher audit quality.

However, the characteristic of cloud-based systems is that the data processed and stored in the
cloud can be a new challenge around third-party management and data security and
confidentiality. Thus the auditor needs to implement more cyber securities which are costly to
implement.

According to KPMG 2017 (focus on Audit Quality), it states that according to the report it states
that artificial intelligence like IBM Watson can read, listen, learn and process billions of
documents per minute. This artificial intelligence works with all the accounting standards the
United States Generally Acceptable Accounting Principles or International Financial Reporting
Standards and even Swiss Financial Market Supervisory Authority or the Public Company
Accounting Oversight Board.

However, the same reports suggest that the auditors will have to gain a level of comfort over
the reliability of the financial data being processed by the robot because the audit profession
has little experience to date with auditing environments using robots.

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According to the auditing report in 2017, it states that blockchain has been a rising issue in the
report because it states that they don’t have a view and they have anticipated having a view
soon. For the time being, the banks act as a liaison between the companies.

However, based on ICAEW and the Dubai Financial Services Authority, states that blockchain
will prove to be the most important point to successfully implement a digital economy in the
auditing practices, but also it has already been implemented in Dubai. Usually, the blockchain
will be more towards the development of new securities.

According to ICAEW, it states that before the implementation of technology, the audit approach
was based on a combined risk using substantive sampling testing and assessment of controls.
Now with technology being the driven force, it helps us to test the full population of entries and
not only a sample. With the digitized audits, we can see the weakness and we can control the
weakness easily.

According to Marcus Freeman states that as the technology gives us the ability to test the
entire population and this drives a value of an audit. The data analysis allows the auditor to
have both a helicopter view of the financial statement but also a detailed view of the
accounting records, and this will lead to more insight.

However, this will put more pressure on the auditor, to detect fraudulent transactions, as
technology now exists to highlight any journal entries that are deviating from the standard
process and other abnormalities.

Hisham Farouk states that currently corporates leverage the audit partner relationship as a
source of valuable business advice, but this becomes less important when the machine learning

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tools provide more details on the red line issues in the business and provides a potential
solution to remedy the problems. However, there will be a real risk of disintermediation of the
audit profession.

According to Dubai reporting it states that there will be a change in how we determine the
audit fees, and this has been possible through digital economy the offshoring company allowed
audit firms to cut costs. The reports states that within a decade, an audit will be completed with
a fraction of a second, giving access to real time data. Typically the audit fees have been
charged based on the time taken to conduct the audit, but audit firm will no longer be selling
time. With the use of technology the fees will be conducted by the amount of digital assets
being utilized.

However this will come at a cost such as the increase in the investment of new audit technology
because, they will have to keep upgrading their software and this migh be really costly in the
near future.

The digital economy is aimed at increasing the security and productivity of using information,
the main resource of the digital economy. When using block chain or cloud systems, it is
possible to register and store facts about a company's financial and economic operations more
reliably, as well as increase the pace of processing and verifying data. A centralized structure of
consistent records allows auditors and regulators to monitor the movement of accounting
statistics in real time. World’s minds are creating a regulatory system for accounting and
controlling all of the technical developments brought on by the new economy. Accounting
reporting takes on a unique format, with a constant flow of data generated in near real time via
modern information technology. These new information systems are usable by all stakeholders.
Accounting standardization would allow auditors to automatically review a large portion of the
critical details that comprises financial (accounting) reporting and nonfinancial reporting. In any
case, the expense and time needed for the audit would be greatly decreased. Audit report…

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Pwc mentions, “You will be using latest tools to help digitize the way we deliver audits.”

It is not shocking that organizations demand the same intelligent use of technology through
their audit, but we are all seeing smooth digital experiences every day. Advanced technology is
now open to all of us, so PwC is investing in a dedicated digital audit team and upgrading each
auditor digitally.

A Deloitte report reveals that 76 percent of the members of the audit committee think
emerging technology needs to be used more widely.

Companies use smart audit tools to integrate and use the cloud to handle records, to
coordinate operations, and to streamline information between audit teams and customers.

“We generally will focus on data analysis, automation and business insights.”- Assurance
manager EY

Data analytics platforms like EY Helix and Pwc Halo gives firms the ability to analyze the entirely
of a company’s data to provide insights and better innovations.

Power BI and Tableau are giving firms the opportunity to provide information in a visual context
to better explain and understand trends in data.

Analyzing trends in data helps firm to drill down and identify risks along with unusual activity
and reporting.

Trends and Their Impact on Audit

Comprehension, that digital changes are based on the recognition, that just technologies are
the basis for almost any company on the market, stimulates the development of a business

9
management strategy through the opportunities provided by the technical process, but also
emphasizes the attendant risks.

Lauren Massey («PwC») notes the need for auditors, especially for internal auditors, to monitor
risks that depend on the introduction of new technologies. Also emphasizes the importance of
self-introduction of advanced technologies. Augmented reality, virtual reality, block chain
technology, artificial intelligence, 3D printing, drones, robots, and the Internet of things, as well
as the commercial Internet of things, are examples of emerging developments that have an
effect on audit practice (network access control of physical objects).

Thus, a report PwC «Moving at the Speed of Innovation» (2018), revealing the current state of
the profession of the internal auditor shows that a huge number of internal audit functions in
the near future are transformed under the influence of new technologies. Experts predict it will
happen in the next two years. PwC conducted a survey among more than 2,500 board
members, executive officers and auditors in 92 countries .

Thus, respondents' responses are conventionally divided into «three main categories:

«Envolvers» (14%) – they are advanced in their technology adoption;

«Followers» (46%) – they are taking notice and following the Envolvers’ technology adoption,
but more slowly;

«Observers» (37%) – if use, then they use only basic technologies; while the active introduction
of technology, as statistics show, pays off

«Others» (3%)»

Also, in response to technological trends in the digital economy, the IT audit is widely
represented in the audit services market. IT audit is divided into different types: IT survey; audit
of IT-department conducted in conjunction with the audit of all IT-related business processes;

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expert review of IT, which allows to identify the possibility of IT infrastructure reforming;
technical IT audit; audit of IT-criterion; integrated IT-audit.

For each business entity a special role is acquired by internal audit, since its timely conduct and
a clear understanding of what is happening are key to the successful development of modern
business. Digital changes in internal audit affect the mindset of employees: it is proposed to use
the Business Intelligence portal of internal audit, namely the use of new technologies, methods
and directly IT tools. The main purpose of Business Intelligence is the correct interpretation of a
large amount of data, focusing on the key performance indicators, and with the help of
Business Intelligence, it becomes possible to model various options for the company's
development by monitoring the results of decisions.

Internal investigation will be able to supply executives with fresh strategies for the company's
corporate growth while using Business Intelligence. This will provide them with clarity in
understanding and aid in the management of the organization's policy as well as risk
management.

The auditor's work will become more versatile and will be minimized in real-time mode, in
which the auditor will have access to computer structures and data as part of their job. It is
understood that, for example, an internal audit expert will have information for more in-depth
study and identification of causes of noncompliance, and also focus on areas that require more
attention.

The value of auditors, who have mastered or are able to master new technologies as soon as
possible, significantly increases. For example, it is understood that the internal auditor will
respond promptly to management's requests, develop verification tools, and also promptly and
exactly distribute them in his organization.

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The results of the changes in the audit will not take long, as all the processes will be less time
consuming, and the necessary reports will be replaced by constant communication using a
special platform for obtaining detailed information.

EFFECTS OF DIGITALIZATION ON AUDITORS

Since digitalization is only in its early stages, it is difficult to know what effect it will have on the
audit profession in the long run. (Van Schoten, 2015; Hunton, 2002). Although, in the report
made by FAR (2016), they believe that automation and digitalization of the accounting industry
will result in systemic improvements that will have a significant impact on the entire audit
profession. More development is also needed, “One thing we know for sure, our time is not
near what the future will be” FAR (2016). Regardless of this, Brynjolfsson and McAfee (2015)
emphasizes that technology is not the future, but rather that it provides us with an immense
power to transform the environment through information technology, and that this force of
change comes with greater obligations. We now have more opportunities to transform the
future than ever before as a result of digitalization, which Brynjolfsson and McAfee (2015)
argue is not a fate, but a deliberate choice we make ourselves. As a result, digitalization is seen
as one of the most critical new phenomena that would have a significant effect on the audit
industry, resulting in reforms. (Brynjolfsson& McAfee, 2015; Forbes Insights, 2015; Janvrin et
al., 2008; Lombardi et al., 2014).

The value of new technologies has been called into question several times by humans. (Yoo et
al., 2010). The way we view these changes is personal, and it may influence the responses and
actions of people employed in affected organizations (Janvrin et al., 2008; Taylor et al., 2000).
According to Hunton(2002), contemporary developments, such as the phenomenon of
digitalization, can be interpreted in two respects, either through apprehension and aversion to
the unexpected, or through the potential possibilities and benefits that it may bring.

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Tools

Accounting and auditing professions have been forced to change their tools and operating
processes in the long term as a result of digitalization (Byrnes et al., 2015; Hunton, 2002).
According to Brynjolfsson and McAfee (2014), the ability to learn and adapt is one of the
characteristics of success. They define changes as either expected or processual, with
digitalization falling into the latter category because it is still being created and understood. Our
world is not in a constant state, and we capture reality in motion (Askarany et al. (2012)). They
conclude that the change is constant and uncertain, and that change is beneficial when
approached with an open mind and a variety of choices in mind. They believe that by facing
change with an open mind, humans will be able to handle change in a complex environment.

Since manual audits take time and new digital technologies make the process quicker,
researchers expect that auditors will eventually focus their decisions on future-oriented
knowledge (Ghasemi et al., 2011; Iuliana&Tugui, 2005; Wallerstedt et al., 2006). These
resources make use of the most up-to-date information and communication technology. If
audits focused on the functionality of the processes that produce the information under audit
rather than just the obsolete digits, information will be more reliable (Nearon, 2005; Sutton,
2000).

“During the year, the realization of digitalization’s effects on our profession has become
stronger. It is fun to see how the profession is now changing towards a more digital business
landscape. Some may worry for all the changes, but I think that digitization will bring many new
opportunities for all professionals. When tools and analytical methods we have so far only
dreamed of becomes reality, we can help entrepreneurs, businesses and organizations even
better to navigate into the future.” (Brännström, 2016)

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Competence

Competence is regarded as one of the three pillars of auditing, as well as a determining factor
in the audit's consistency and value. Auditors are now adapting to the seismic transformation
that digitalization brings in order to stay active in their field and deliver holistic, high-quality
audits (Forbes Insights, 2015; Lombardi et al., 2014). According to Nearon (2005), audit
efficiency requires a combination of independence and integrity. Since organizations are
moving towards the use of more interactive technologies, an organizational social dimension is
being applied to the material world, creating a new challenge for our digital society to a large
extent-: digital materiality Yoo et al. (2010). Han et al. (2016) accept that this is a challenge and
propose that auditors with inadequate IT skills can pose an audit risk. However, suggest that in
order to meet these new challenges, auditors should improve their IT skills and therefore their
competence. Standards now allow auditors to use appropriate technology to consult experts
when necessary (Janvrin et al., 2008). If auditors fail to improve their skills, it is possible that the
audit profession will face significant challenges as a result of the risk that results on the
expectation gap could undermine legitimacy (Power, 2003; Ruhnke& Schmidt,2014; Sutton,
2000). Adaptability is said to be an auditor's supreme capability, which is becoming particularly
important due to society's rapid changes (Forbes Insights, 2015; Yoo et al., 2010). Most
auditors, on the other hand, agree that the auditor's position will largely remain unchanged for
the next decade. Both auditors and previous studies believe that enhanced competence would
be required as a result of digitalization, but that this would not have an impact on audit results.
This implies that further schooling is needed, either by Further or at higher educational
institutions.

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Handling of information

The audit profession will need new technical technologies to manage the information as a
result of digitalization, which will affect how auditors collect, use, and store information
(Bierstaker et al., 2001; Dowling & Leech, 2014; Ghasemi et al., 2011; Granlund, 2007; Han et
al., 2016;Holley, 2004; Iuliana&Tugui, 2005; Spraakman et al., 2015). The majority of auditors
agree, stating that their material usage and handling have improved the most. One of the
auditors mentions how modern technologies have made their daily work easier. The majority of
auditors emphasize how modern technologies and programs make receiving and
communicating with clients simpler. Digitalization, accompanied by the creation of applications
and methods, makes it possible to explore more data and take wider samples. The majority of
auditors see this as an advantage to the practice because it offers more protection than manual
sampling. The auditors, on the other hand, have not seen any changes in the demand for
timeliness among their customers. While most auditors say the contrary, that digital content is
harder to assimilate, Brynjolfsson and McAfee (2015) claim that the digital format improves
interpretation of the information.

Paperless

According to previous research (Bierstaker et al., 2001; Dowling & Leech, 2014; Ghasemi et al.,
2011; Lombardi et al., 2015; Power, 2003; Rezaee et al., 2001), the audit career is becoming
entirely paperless. The auditors elaborate on this by explaining that the same work would be
performed, but with a range of new uniform operating procedures within the discipline.
According to Alles (2015) and Janvrin et al. (2008), digitalization of working practices is causing

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the audit profession to become synonymous with IT-auditing, and IT-auditors would almost
certainly be needed. This is something that one auditor in particular stressed, and it is backed
up by a couple other auditors. Regardless of how the future unfolds, the practice will almost
certainly become completely paperless, and the auditor will almost certainly still be needed.

Lost job opportunities

According to previous studies (Breman&Felländer, 2014; FAR, 2016; Forbes Insights, 2015),
digitalization will result in job losses. However, the majority of auditors are divided about
whether or not the auditor can be replaced. There are also claims that machines cannot entirely
override human insight and understanding (Brynjolfsson& McAfee, 2012; Zuboff, 1988).
Auditors expect that as the auditor's position will evolve and the demand for auditing will
continue, the role of the accounting consultant will evolve even further. One auditor in
particular points out that digitalization of the audit profession will result in work losses, but this
is seen favorably by the auditor, who believes that this aspect of the labour market can only
change rather than vanish. Breman and Felländer (2014) emphasize the importance of a
competitive labor market and labor education, which the auditors still emphasize. As a result,
it's possible that education and versatility among auditors will become more important in order
to avoid work losses.

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(c) The importance of Digital Economy in the Mauritian context. (10 marks)

Introduction:  Mauritius is heading determinedly

towards the latest industrial
revolution with digitalization
propagating across the economy;
making use of technological
applications powered by huge
amount of data ,data that can be
freely used, apps on smartphones,
sharing of data via the award winning
InfoHighway platform and identity is
verified via cellphones. This will lead
to a fall in secrecy in the economy; it
will therefore be more transparent.
Additionally, better decisions will be
made and integrated facilities will be
offered to natives and organisations.
 In Mauritius, the auditors must
understand the impact of digitization
in companies and the way it will be
expanded in the forthcoming years.

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Impact of 3 principal digital trends on
auditing relating to Mauritian economy:
18
Moreover, they need to explore
techniques so that recent
technologies (such as robots and
artificial machines) may be audited. In
addition, the auditors are required to
apply digital technologies in their own
firm and audit procedures, to ensure
that the quality of the audit report is
maintained and to cope with the
rising audit costs.
1) -Data Analytics leads to an
improvement in the performance of
an organisation. Data Analytics
(separated into large transactional
data and big data analytics) are
brought about and processed via the
financial systems of businesses.
Actually, additional standardization
and cloud has lead to the evolution of
financial reporting systems.
-Besides, an increase in the use of
systems that have been harmonized
and standardized has resulted in a
rise of centrally available
transactional and master data
volumes.
-Hence, this enables the auditors to
attain a more efficient and better
quality audit.
-Moreover, according to auditors,
 auditing needs to be adjusted around
cloud systems. There should be the
transformation of audit approaches
into more data analytics driven
procedures so that fewer preventive
controls in the systems are addressed.
Fortunately latest technologies, such
as in-memory databases- currently
enable auditors to do quick and smart
analytics.
As per the cloud based systems, the
refinement and storage of data takes
place in the cloud; which has resulted
into threats around third-party
management and it needs to be
ensured that data is secured and
confidential. As such, there should be
a higher level of integration of cyber-
security capacity in the audit reports;
which is required to be carried out by
auditors due to a rise in the quantity
of cloud- based systems.
-Also, there is a difference between
big data and large transactional data
in Enterprise-Resource-Planning (ERP)
systems. Big data is generally denoted
by volume, speed and diversity.
Therefore, the auditors should have
enough understanding of how big

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 data solutions can provide additional
support to auditing.
It should be noted that a higher
number of auditors, oversight bodies
and regulators understand that
henceforward new techniques will
have to be implemented in audit
methodologies and guidance.
2) Robots and Artificial Intelligence
-Business activities at audit clients are being
changed by Robotics and Artificial
Intelligence and this evolution has given rise
to new opportunities for auditing. If the
clients are making use of software robots in
key financial processes, the auditors will have
to trust that the (financial) data being
processed by the robot is reliable. The audit
process will also be supported by Artificial
Intelligence; for instance, robot software will
be assessed by an audit-robot.
-Furthermore, Artificial Intelligence such as
IBM Watson- where billions of documents
can be read, listened , learnt and processed
in one minute, can collaborate with all the
accounting standards; International Financial
Reporting Standards (IFRS) including the
Learning of judgements and other audit
considerations, and making use of this to give
advice to auditors in some audit challenges.

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 -In addition, evidence acquired could be read
and interpreted by Artificial Intelligence and
even filed into the electronic audit file, while
the assertions are ticked off.
Nevertheless, there is uncertainty regarding
the development of the artificial techniques;
which will clearly require changes. This may
disruptive in auditing.
3)Blockchain
- Blockchain establishes a direct connection
between customers and sellers; without the
need of a 3rd party (example: bank). In fact, it
provides a 24/7 and 100% trustworthy view
on inventory, shipments and movement of
goods.
- Furthermore, Blockchain technology has the
capability to influence the whole
recordkeeping process, including the
techniques of initiation, processing,
authorization, recording and reporting of
transactions. As such, auditors will need to
take into consideration the traditional stand-
alone general ledgers as well as blockchain
ledgers in order to obtain adequate reliable
audit evidence.
-Additionally, this will give rise to higher
standardization and transparency in
reporting and accounting, which could allow
a higher number of efficient data to be

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 extracted and analysed.
-Besides, independent auditors will need to
have a proper understanding of the
implementation of blockchain technology at
client sites, whether blockchain business
opportunities are being pursued by clients,
blockchain business applications are being
implemented, or blockchain in accounting is
being applied.
However, there is an increase in the risk of
cyber attacks on blockchain and rules may be
defined along the way.
It should also be noted that blockchain has
not yet been fully implemented in the
mauritian digital economy. The government
is looking forward for its promotion, since it
forms part of the key areas that will lead to
the creation of new opportunities and
growth, in the future.

Importance: 1)Data Analytics and collaboration

and sharing tools have lead to the
automation and enhancement of
existing processes; which help to
ensure quality in audit report. On the
other hand, advanced technology
such as Artificial Intelligence is also
involved in the evolution of the scope
of the audit. (For example: Data
Analytics helps in identifying fraud.)

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 2)Artificial Intelligence is used for
automatic reading, understanding and
testing of client documents which
include reported cash balances, bank
reconciliations, bank confirmation
letters, foreign exchange and the
financial condition off the bank-
basically, the complete audit of cash.

3)-Blockchain eliminates the necessity

for inter-firm verifications since all
essential information remain
unchanged in blocks. This implies that
a fall in the number of intermediaries
will reduce the risks of probable
intrusion into the internal system of
the organisation. As such, the
auditors will analyse; less risk of
misstatements in financial
statements.
-Besides, there is full transparency of
each operation; that can lead to the
transformation of the concept of
confidential information- where only
the counterparties are aware of the
details of the transaction.
-Additionally, records can be
processed and checked more rapidly

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 when the blockchain technology is
used. Inspectors and regulators are
allowed by a central system with
unmodified data- for the monitoring
of the flow of accounting figures in
present time. Hence, this will enable
the auditors to present a timely audit
report.

4)Since accounting has been

standardized, the auditors will be allowed
to spontaneously verify a significant part
of the crucial information that forms part
of the financial and non-financial
reporting. Hence, there will be a
significant fall in cost and time needed for
the audit.
5)There has been a significant increase in the
value of auditors who have mastered latest
technologies quickly. For instance, there will
be the development of verification tools
which will be rapidly and exactly distributed
in the organisation, by internal auditors. They
will also respond quickly to management’s
requests.
6)The result of any change in the audit will be
prompt, as the whole audit process will
consume less time and continuous
communication which use a specific platform

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 to obtain precised information will replace
the essential reports.
7) Management will be able to be
provided with new ideas on the strategic
development of the firm; by the internal
audit. Therefore, management can be
provided with transparency in understanding
and assist the management of the firm’s
strategy and risks.
8) Automated risk indicators will allow the
internal audit to begin their analysis in a
timely way, whereby significant time in their
search is saved.
9)The work of the auditor will be flexible and
timely, where information systems will be
accessible to the auditor, and data as part of
their work. For instance, an internal audit
expert will have information for additional
profound study and identification of causes
of non-compliance, and also focus on areas
which seek greater attention.
10)The automation of tasks such as the
recording of work in repositories, data
extraction and sampling has lead to the
improvement of the quality of audit.
Consequently, there will be an increase in
efficiency and reduction in errors. In addition,
the audit team will have a better focus on the
firm, since they will rely less on tasks which

25
 provide limited value. Hence, there will be an
improvement in the retention of talent and
the audit team will be more confident that
are better-informed.
11)The auditors will be able to provide the
highest quality of audit; having mastered
new technology.
12)Audit teams will have more time for
information analysis and a better
understanding of the firm, where they carry
out the audit process; and which can lead to
the reduction of the risk of manual errors.

Possible risks/ Challenges 1) -The internal auditor needs to

monitor the risks associated with
the introduction of the latest
technologies (Data Analytics,
Robots and Artificial Intelligence
and Blockchain).
-The auditor also needs to ensure
that he is making use of them in
the right way. For instance, they
need to focus on how they make
the audit process better or easier
and how return on their
investment will be measured.
-The auditor also need to ensure
that these technologies are easily
integrated into the actual
processes and identify any

26
 possible implementation
problems promptly.
-There should be the provision of
training and development which is
essential to make certain audit
teams to understand how and the
reason a particular technology is
being used. In addition, this can
be a favourable opportunity for
junior staff , for leading in an area
where they may feel more at
ease.
-Risks: The need to adhere with
the newest expert advice on
evolving technologies, newest
tools, protection of data and
cyber security.
-Both the audit-firm and client-
firm should understand the
technology being implemented,
the way it will be used and its
benefits. This would help some
concerns to be mitigated, but not
all the staff of the audit team may
be familiar with the latest
technology, and some may
require to be more reassured.
2) Technology needs an initial
investment and its

27
 implementation can be
challenging; but the value cannot
be denied once it is up and is
running.
3)New technology involves new
risks, which range from
concession with the newest data
protection rules to the protection
of the firm against prohibited
access. Audit teams need to be
well-equipped with experts on
different software applications
and platform technologies to keep
their clients informed about the
strengths of their security or any
change in control and the ability
to rely on the functionalities
which have been automated such
as reports, calculations or
segregation of duties.

Conclusion:  As a whole, the Mauritian auditors

should perceive digital economy as a
must and an opportunity to enable
auditing become more efficient,
improve its quality and add value to
it.
 In addition, it will be a necessity for
auditors to deal with digitalization,
have a good understanding of its

28
 impact and to be technologically
competent to keep up with it.
 Consequently, a digital strategy must
be defined, experiments should be
explored, staff should be trained and
transformed, and innovation should
be driven; by auditors. They should
also establish partnership with others
or even obtain start-ups.

References:

FAR. (2016). Nyckelntillframtiden. FAR. Retrieved from

https://www.far.se/globalassets/trycksaker-pdf/nyckeln-till-framtiden_uppslag.pdf

Brynjolfsson, E. & McAfee, A. (2015). Den andramaskinåldern: arbete,

utvecklingochvälståndientidavbriljantteknologi. Göteborg: Daidalos.

Yoo, Y., Lyytinen, K. J., Boland, R. J. &Berente, N. (2010). The Next Wave of Digital Innovation:
Opportunities and Challenges: A Report on the Research Workshop “Digital Challenges in
Innovation Research.” SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1622170

Breman, A. &Felländer, A. (2014). Diginomics - nyaekonomiskadrivkrafter. Retrieved from

http://www.nationalekonomi.se/sites/default/files/NEFfiler/42-6-abaf.pdf

29
 i. https://ncb.govmu.org
ii. assets.kpmg
iii. www2.deloitte.com
iv. defimedia.info
v. accaglobal.com
vi. FAR. (2016). Nyckelntillframtiden. FAR. Retrieved from
https://www.far.se/globalassets/trycksaker-pdf/nyckeln-till-framtiden_uppslag.pdf
vii. Brynjolfsson, E. & McAfee, A. (2015). Den andramaskinåldern: arbete,
utvecklingochvälståndientidavbriljantteknologi. Göteborg: Daidalos.
viii. Yoo, Y., Lyytinen, K. J., Boland, R. J. &Berente, N. (2010). The Next Wave of Digital
Innovation: Opportunities and Challenges: A Report on the Research Workshop “Digital
Challenges in Innovation Research.” SSRN Electronic Journal.
https://doi.org/10.2139/ssrn.1622170
ix. Breman, A. &Felländer, A. (2014). Diginomics - nyaekonomiskadrivkrafter. Retrieved
from http://www.nationalekonomi.se/sites/default/files/NEFfiler/42-6-abaf.pdf
x. Dubai Financial Reporting
xi. ICAEW (2019 Impact of audit)

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