Relationships, perceived or actual, are complicated for collective audit teams at least in part

because auditors and IT specialists are different—in their expertise, education, functional units,
and routine tasks and jargon (Danos et al. 1989). Such differences can both “enhance” or
“disrupt” their ability or willingness to work together effectively, although determining the
factors that affect whether these differences help or hurt “has proven to be challenging”
(Milliken and Martins 1996; van Knippenberg et al. 2013, 183). This literature suggests that
members of different groups view, feel, and act more positively toward each other when they
have a stronger, one‐team identity (Hogg 2013) and that they coordinate and communicate more
effectively when the relationship between them is less arduous (Szulanski 2000; Kane et
al. 2005). Theory and evidence are rather limited, however, on the specific ways relationship
quality influences coordination and communication (Kane 2010). Further, while prior research
and the PCAOB identify coordination and communication failures between auditors and IT
specialists, and the PCAOB points to such failures as potential root causes of IT‐related audit
deficiencies in internal controls over financial reporting (Danos et al. 1989; PCAOB 2012a;
Boritz et al. 2017), with the exception of Boritz et al. (2017), these findings provide little insight
into the specific ways that such failures transpire.[CITATION Tim19 \l 1033 ]
Looking at the challenges faced by the auditing professions on the emerging technologies, the
following can be recommended;

1. Auditors should gain a holistic understanding of changes in the industry and the
information technology environment to effectively evaluate management’s process
for initiating, processing, and recording transactions and then design appropriate
auditing procedures. This understanding includes, but is not limited to, understanding
likely sources of potential misstatements and identifying risks and controls within
information technology.
These are integral procedures of the top-down approach auditors use to identify
significant accounts and disclosures and their relevant assertions during the risk
assessment process. 
2. Auditors, as appropriate, should consider risks resulting from the implementation
of new technologies and how those risks may differ from those that arise from more
traditional, legacy systems. Auditors should be aware risks can arise due to program or
application-specific circumstances (e.g., resources, rapid tool development, use of third
parties) that could differ from traditional IT Understanding the system development
lifecycle risks introduced by emerging technologies will help auditors develop an
appropriate audit response tailored to an organization’s circumstances.
3. Auditors should consider whether specialized skills are necessary to determine the
impact of new technologies and to assist in the risk assessment and understanding of
the design, implementation, and operating effectiveness of controls. If specialized
skills are considered appropriate, auditors may seek the involvement of a subject matter
 expert. Auditors also should obtain a sufficient understanding of the expert’s field of
expertise to evaluate the adequacy of the work for that auditor’s purposes. [ CITATION
Lin19 \l 1033 ]

As auditors acquire an understanding of the impact of technology on a company’s business, its

structures of internal control, and its financial reporting, some vital reminders include the
subsequent:

 Maintain sufficient professional skepticism when reviewing management’s risk

assessment for new systems.
 Understand the direct and indirect effects of new technology and determine how its use
by the entity impacts the auditor’s overall risk assessment.
 Understand how the technologies impact the flow of transactions, assess the
completeness of the in-scope ICFR systems, and design a sufficient and appropriate audit
response.
 Assess the appropriateness of management’s processes to select, develop, operate, and
maintain controls related to the organization’s technology based on the extent the
technology is used.
As part of testing the accounting estimate, auditors could don't forget the more traditional risks
associated with the completeness and accuracy of the data elements, in addition to the AI’s
technique, which may additionally present specific demanding situations because of the system
gaining knowledge of inherent in AI.

While emerging technologies can bring about great opportunities and efficiencies for a business,
additionally they bring with them new challenges. A knowledge of those rising technologies and
a cognizance of the benefits and risks they present to financial reporting is crucial for auditors,
management, and audit committees to discharge their respective duties. [ CITATION Lin19 \l 1033 ]