Role of Technology in Corporate GovernanceTwo parts: Education PracticeAuditing Implications Still have the same principles - looking for evidence to meet the assertions We have moved away from paper-based, in practice we rely on digital and electronic evidence. Electronic areas: Invoice - how do you know it's the right one? Transactions - were they authorized? How do you authenticate it? Can you use technology to do better and cheaper audits? Audit fee pressure Expedite what is being done manually - same quality, less hoursMeeting Challenges and Expectations of Continuing Auditing in the Context of Independent Audits of Financial Statements (article by Saeed Roohani and Hui Du) For a couple of decades, people argued that there could continuous audit Difficult for many reasons but definitely has a good idea behind it but the time is not yet here Some said imagine accounting firm has a program that would install in clients' computers and it can see everything the company is doing on a realtime basis. Auditors are watching all the transactions that are going through the process and can be doing the audit work at any time. Problems: In theory auditing in real-time is a good thing, but is there any demand for it being done in real-time? If there is demand for it, to have information verified minute by minute, this could affect independence if you are present 24/7 year after year Would be great for internal audit for instant and constant observation of activities, continuous auditing could be beneficial Technology has a role to play in accounting and auditingSupply and Demand for Continuous Reporting (Article #3 on p.7) Continuous Reporting and Continuous Assurance Walmart does continuous reporting Continuous reporting affects the footnotes as numbers, risk factors...etc. change everyday This article talks about the supply and demand for continuous reporting Anything tied into periods will have to go No concept of earnings - stop at one point and measure earnings for period - will no longer be relevant. No more earnings statement because now its continuous. Prepare financial statements for one year, as of now are done once a year. Attractive because there is a good number of research and people in the market that say a lot of information currently produced is not helpful. Not all elements of the financial reporting process need continuous reporting, just the elements there is a demand for. If it's going to happen, it won't be done for items that wouldn't benefit from it. Continuous reporting will affect the stock market - less volatile - more changes in the stock price since they are done on a continuous basis but there won't be large spikes . Small changes over a period but not large change at the end of a period. Relevance vs. Reliability: continuous reporting will help relevance, providing timely information. Reliability may be questionable because they are coming out every second and there is no opportunity to conduct an audit of all the information together, and the independence of the auditor would also be called into question since information is coming in continually.