DURBAN UNIVERSITY OF TECHNOLOGY

AUDITING & TAXATION

COVER SHEET: GROUP ASSIGNMENT

BEFORE SUBMITTING THIS ASSIGNMENT, PLEASE ENSURE THAT:

• all group members have filled in their details in the table below:
• all group members have read and signed the declaration below:
• there is no plagiarism.

MODULE NAME DUE DATE

Business Informatics 2 October 2023

SURNAME FIRST NAME STUDENT NUMBER CONTRIBUTION

% / DETAILS

STUDENT 1 Ndaba Mbalenhle 22148074 cloud computing

plus and typing
assignment as a
whole) following
formatting
guidelines

STUDENT 2 Ngcobo Nokuzotha 22156254 Privacy and smart

home and
technology

STUDENT 3 Mqadi Nandipha 22137732 Health & safety

and automation,
artificial
intelligence, and
machine learning

STUDENT 4 Mbokazi Zinhle Akhona 22107086 Security and big

data.

STUDENT 5 Zulu Nolwazi 22025848 Ethic issues and

advanced
codinglanguages

STUDENT 6

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 DECLARATION
We declare that:

• We have checked this assignment to ensure that it contains no instances of plagiarism.

• Where the work of others has been relied upon in this assignment, it has been duly
acknowledged and clearly referenced.

Student 1 Signature: M. Ndaba

Student 2 Signature:
Student 3 Signature:
Student 4 Signature:
Student 5 Signature:
Student 6 Signature:
N. Ngcobo Date: 30 September 2023
N.Mqadi Date: 30 September 2023
ZA. Mbokazi Date: 30 September 2023
N.Zulu Date: 30 September 2023
Date: 30 September 2023

Table of Contents
EMERGING TRENS................................................................................................................................4
PRIVACY................................................................................................................................................6
HEALTH ISSUES.....................................................................................................................................8
SECURITY ISSUES...................................................................................................................................8
ETHICAL ISSUES....................................................................................................................................9
REFERENCES.......................................................................................................................................10

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EMERGING TRENS

Cloud computing: In the field of accounting, particularly in the fields of taxation and
auditing, cloud computing is a new trend. It describes the practise of storing, managing, and
processing data on distant servers housed on the internet as opposed to relying on local
servers or personal computers. For accounting professionals, this technology has a variety of
advantages, including better efficiency, cost savings, and teamwork.

Cloud computing in the auditing industry enables auditors to access and analyse financial
data at any time, from any location. This makes it unnecessary to be present physically at
customer locations and makes it possible for real-time data sharing and cooperation. Auditors
can perform data analytics, prepare reports more quickly, and securely access client data that
is housed in the cloud. Furthermore, cloud-based audit systems offer cutting-edge capabilities
like automated data validation, risk assessment, and fraud detection, improving the precision
and efficacy of audits. By automating data management and compliance, cloud computing
also revolutionises taxation procedures. Tax professionals no longer need physical storage
and can safely keep and access client tax records, forms, and documents in the cloud,
lowering the risk of data loss.

The rapid preparation and submission of tax returns is made possible by cloud-based tax
software, which also includes built-in compliance checks and automatic changes to tax
legislation. For tax experts and their clients, this ensures accuracy, lowers errors, and saves
time.

Data analytics: Data analytics is a developing trend in the accounting industry, particularly
in tax and auditing. It entails applying cutting-edge methods and equipment to analyse
massive amounts of data and derive insightful conclusions.

Data analytics in auditing: The use of analytical methods to audit data is referred to as data
analytics in auditing. To analyse financial transactions, find patterns, spot abnormalities, and
judge the efficiency of internal controls, specialised software and algorithms are used.

Large datasets can be analysed to help auditors better understand an organization's financial
processes, spot potential hazards, and form more accurate and trustworthy audit judgements.

Data analytics in taxation: Data analysis techniques are used in taxation to enhance tax
compliance and enforcement. Data analytics can be used by tax authorities to spot potential
tax evasion, catch fraudulent activity, and make sure that taxpayers are according to the law.

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Tax authorities can find patterns, abnormalities, and discrepancies that might point to
noncompliance by analysing vast amounts of taxpayer data. They can narrow the tax gap
because of better resource allocation.

Advanced coding languages: In the areas of auditing and taxation, advanced coding
languages are undoubtedly becoming more common. certain languages provide strong tools
and skills that can speed up procedures, increase precision, and boost efficiency in certain
domains. Some of the commonly used coding languages in taxation are, python, R, SQL,
SAS, MATLAB.

These advanced coding languages provide tax professionals and auditing professionals with
powerful tools to automate tasks, analyse complex tax data, and make informed decisions. It
is important to note that proficiency in these languages may require some learning and
practise. These languages offer numerous benefits, including increased efficiency, improved
accuracy, enhanced data analysis capabilities, and streamlined processes. Accountants who
embrace these coding languages will be well-equipped to navigate the evolving landscape of
auditing and taxation.

Smart home and technology: Integration of loT devices: Smart home technology often
involves IoT (Internet of Things) devices. In accounting, IoT devices can be used for realtime
tracking of assets and inventory. For auditors, this means more accurate and easily accessible
data for audits. With the increased use of smart devices, data security and privacy become
paramount. In the auditing sector, ensuring the integrity of financial data is crucial. This
involves auditing the security systems of smart home devices to prevent unauthorized access.
Smart home technology often incorporates automation and AI systems. In the context of
accounting, automation can streamline various tasks, reducing the margin for error and saving
time. For auditors, this means auditing AI algorithms to ensure they are accurate and comply
with auditing standards. Blockchain in Auditing While not directly related to smart home
technology, blockchain technology is significant in the auditing sector. It provides an
immutable ledger, ensuring the integrity of financial data. The integration of blockchain
technology might intersect with the developments in smart home tech, especially in terms of
secure data transmission.

Smart home technology allows accountants and auditors to access data remotely. This is
especially important in South Africa, where the vast geography can make physical access to
clients difficult. Mobile apps and cloud-based systems, often integrated with smart home

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devices, allow professionals to work from anywhere. Smart home technology can also be
harnessed to promote. environmental sustainability, which is a growing concern globally.

Automation, artificial intelligence, and machine: Particularly in auditing and taxation,

automation, artificial intelligence (AI), and machine learning (ML) have revolutionised the
accounting industry. Automation is the use of technology to speed up and decrease errors in
repetitive operations like data entry and reconciliation. Al entails the creation of computer
systems that can carry out operations that ordinarily call for human intelligence, such as the
analysis of huge datasets and the generation of forecasts.ML is a subset of Al that gives
computers the ability to continuously learn from data and enhance their performance.
Processes can be streamlined, risk assessment can be improved, and financial statement
irregularities can be found using automation and Al in auditing. These technologies can help.

These technologies can help with tax preparation, compliance, and fraud prevention.

PRIVACY

In the auditing and taxation sectors of South Africa, privacy in information systems is a
critical aspect that requires meticulous attention and adherence to legal frameworks and
industry standards. Here are specific points relating to privacy in information systems within
the context of auditing and taxation in South Africa:

Legal Compliance: The auditing and taxation sectors in South Africa must adhere to the
Protection of Personal Information Act (POPIA). POPIA regulates the processing of personal
information and sets out the conditions that businesses must follow when collecting,
processing, storing, and sharing personal data.

Client confidentiality: Maintaining strict client confidentiality is fundamental. Information

systems should ensure that client data, including financial records and personal information,
are protected from unauthorized access or disclosure. This includes implementing access
controls, encryption, and secure communication channels.

Data Encryption: Data transmitted over networks and stored in databases should be
encrypted. Encryption algorithms protect data by converting it into unreadable code, ensuring
that even if unauthorized individuals gain access to the data, they cannot interpret it without
the decryption key.

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Access Control: Access to sensitive information should be restricted to authorized personnel
only. Role-based access control ensures that employees can only access the data necessary for
their specific roles, minimizing the risk of unauthorized access.

Regular security audits: Conducting regular security audits and assessments of information
systems helps identify vulnerabilities and weaknesses. These audits enable organizations to
take proactive measures to strengthen their security measures and protect sensitive data.

Secure communication: Secure channels of communication, such as encrypted emails and

virtual private networks (VPNs), should be used for exchanging sensitive financial
information between clients, auditors, and taxation professionals. Secure client portals can
also be employed for sharing confidential documents securely.

Data Retention Policies: Implementing clear and well-defined data retention policies ensures
that data is not kept longer than necessary. Unnecessary data should be securely deleted,
reducing the potential impact of a data breach.

Employee training: Employees should be regularly trained on data privacy policies, security
best practices, and the potential risks associated with handling sensitive client information.
Awareness programs are essential for preventing human errors and social engineering attacks.

Incident response plan: Having a robust incident response plan is crucial in case of a data
breach. A well-prepared plan outlines the steps to be taken in the event of a security incident,
ensuring a swift and coordinated response to mitigate potential damages and inform affected
parties.

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HEALTH ISSUES

There are various significant health and safety considerations to consider when it comes to
auditing and taxation, including:

Ergonomics: Tax and accounting professionals frequently put in long hours in front of a
computer. Musculoskeletal problems may result from poor ergonomics. To maintain their
wellbeing, appropriate workstations, chairs, and computer sets are necessary.

Eye Strain: Prolonged looking at displays can lead to pain and eye strain. This problem can
be resolved by encouraging regular breaks and offering anti-glare screens.

Mental Health: The tax filing season can be very demanding. It is essential for mental health
to promote a friendly work atmosphere, allow access to counselling services, and promote
work-life balance.

Data Security: Both auditing and taxation include the handling of private financial data.
Making sure that data is Ims

SECURITY ISSUES

Inadequate security measures: Weak security measures, such as outdated software, lack of
encryption, and inadequate access controls, can make information systems vulnerable to
unauthorized access, data breaches, and cyber-attacks. This can result in the loss, theft, or
alteration of sensitive financial and personal information.

Data Breach: A data breach can occur when an information system is compromised, resulting
in unauthorized access, collection, or disclosure of sensitive data. In the audit and tax field,
data breaches can have serious consequences, including the exposure of client financial
information and loss of confidence in an organization's ability to protect sensitive data.

Information Security Management: Information security management, including the

implementation of policies, procedures, and controls, is critical to audit and tax functions.
However, research shows that information security management and communication of
security information in South African government departments are often inadequate, which
can lead to security risks.

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Cybersecurity and Incident Response: Cybersecurity risks such as data theft, account
compromise, and system disabling are a major concern for audit and tax departments [6].
Organizations must have robust cybersecurity measures in place, including incident response
plans, to effectively detect, respond to, and recover from cyberattacks.

Privacy and disclosure risks: Privacy and disclosure risks refer to the potential loss of
control over tax information and personal data. In the context of information systems in the
field of auditing and taxation, these risks can arise from inadequate security measures, data
breaches, or improper handling of sensitive information.

ETHICAL ISSUES

Confidentiality and Privacy: Auditing and taxation firms are responsible for handling
sensitive financial and personal information belonging to their clients. It is of utmost
importance to maintain the confidentiality and privacy of this information in order to uphold
trust and meet legal and professional obligations. However, the advent of new technologies
like cloud computing and data analytics has introduced challenges in ensuring the security
and privacy of client data.

Integrity and Objectivity: Auditors and tax professionals are required to uphold strong
levels of integrity and objectivity in their work. However, the utilization of information
systems can present chances for manipulation, fraud, or bias in the reporting and analysis of
financial data. Consequently, this can give rise to ethical concerns, including the loss of
trustworthiness in audited financial statements.

Competence and Professionalism: The accounting sector is experiencing rapid

technological advancements, which means professionals must constantly update their skills
and knowledge. However, ethical issues can arise when professionals lack the necessary
competence to effectively and ethically use information systems. This can lead to errors,
misinterpretation of data, or inadequate analysis, all of which can have serious consequences
for clients and stakeholders.

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Emerging Technologies: The incorporation of emerging technologies, like artificial
intelligence and blockchain, into auditing and taxation procedures can bring about ethical
dilemmas. These technologies might possess biases, lack transparency, or be vulnerable to
manipulation, all of which can affect the precision and dependability of financial data.

Professional Independence: Auditors and tax professionals are required to maintain

independence from their clients in order to ensure the objectivity and integrity of their work.
The use of information systems, particularly when provided by the client, lead to conflicts of
interest and undermine professional independence. This can result in ethical problems, such
as the manipulation of data or the omission of important information to benefit the client's
interests.

REFERENCES

1. https://www.studocu.com/en-us/messages/question/3400030/discuss-and-
describeemerging-trends-privacy-legal-security
2. Holtzblatt, M. A., Foltin, C., & Tschakert, N. (2020). Learning from Ethical
Violations in Public Accounting: A South African Audit Scandal and a Firm’s
Transformation. Issues in Accounting Education, 35(2), 37–
63. https://doi.org/10.2308/issues-19-062
3. Holtzblatt, M. A., Foltin, C., & Tschakert, N. (2020b). Learning from Ethical
Violations in Public Accounting: A South African Audit Scandal and a Firm’s
Transformation. Issues in Accounting Education, 35(2), 1–11.
https://doi.org/10.2308/issues-19-062tn
4. Ethics, technology, and the professional accountant in the digital age. (2021, April
1). IFAC. https://www.ifac.org/knowledge-gateway/supporting-
internationalstandards/discussion/ethics-technology-and-professional-accountant-
digital-age
5. Guragai, B., Hunt, N., Neri, M. P., & Taylor, E. Z. (2015). Accounting Information
Systems and Ethics Research: Review, Synthesis, and the Future. Journal of
Information Systems, 31(2), 65–81. https://doi.org/10.2308/isys-51265
6. https://web.mei.edu/viewport?FilesData=Ethical_Issues_In_Advanced_Accounting_
Mcgraw_Hill.pdf&pdfid=W91w990
7. Holtzblatt M.A Foltin, C & tschakert N 2020 , A South African audit scandal and a
firms transformation
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8. Guragai B & Hunt N, Neri M.P Taylor EZ- 2015

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