FACULTY OF BUSINESS AND ACCOUNTING

DIPLOMA IN ACCOUNTING

PRINCIPLES OF AUDITING (DIA 5033)

GROUP ASSIGNMENT

PREPARED FOR:

MADAM NUR EZZA FAUZIANA BINTI RAMLEE

PREPARED BY:

JENNY LIEW SUH NAH(2021232333)

JOANNA EVE ANAK PRESLEY (2021232334)

LAU SZE LING (2021232335)

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 Table of Contents

ACKNOWLEDGEMENT .........................................................................................................
3
INTRODUCTION .....................................................................................................................4
OBJECTIVES ............................................................................................................................
4
THESIS STATEMENT ............................................................................................................5
1.0 DISCUSSION ......................................................................................................................
6
1.1 Full bibliographic
citation ........................................................................................6
1.2 Intended audience ....................................................................................................7
1.2.1 Researchers ............................................................................................7
1.2.2 Auditors ..............................................................................................7-8
1.2.3 Students .................................................................................................8
2.0 INTRODUCING DIGITAL
AUDIT ...................................................................................9
2.1 What is Digital audit ................................................................................................9
2.2 Research
Problems ...................................................................................................9
2.3 The goals according to the audthor ....................................................................9-10
3.0 DEFFINING DIGITAL AUDIT IMPACT ON PERFORMANCE QUALITY
IMPROVEMENT ..............................................................................................................10
3.1 The impact of performance based on findings ..................................................10-
21
4.0 LANGUAGE .....................................................................................................................22
4.1 The
effects ..............................................................................................................22
4.2 The vocabulary ......................................................................................................22
5.0 REFERENCES
GIVEN .....................................................................................................23
5.1 References Given ..............................................................................................23-
24
6.0 EXPECTED
RESULTS .....................................................................................................25
6.1 Applying Digital audit firms and
offices ................................................................25
6.2 The Proper design and sound Implementation of Financial Statement in Audit ..23
6.3 Utilizing .................................................................................................................26
7.0 ACCOMLISH
OBJECTIVE ..............................................................................................26
8.0 RECOMMENDATION .....................................................................................................2
6
9.0 CONCLUSION .................................................................................................................27
10.0 REFERENCES ...........................................................................................................28

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ACKNOWLEDGEMENT

We would like to express our feelings of appreciation and gratitude to our own helping hand
especially our dearest lecturer, Mdm Ezza Fauziana, that made us have the possibility to
complete this report. We also are very thankful for our lecturer by encouraging and helping
us to coordinate this report.

We appreciate to all roles that we gave to our group member, Jenny Suh Nah as the
leader that oversee the report and also helping the other member, Joanna Eve Anak Presley
who helped guiding the team and lastly Lau Sze Ling who share most of her suggestions in
this report.

Overall, we as a teammate goes along very well in completing this assignment because
everyone is contributing.

Thank you.

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INTRODUCTION

First of all, I would like to share my happiness in working this article review to my
beloved lecture of Diploma in Accounting, Mdm Ezza Fauziana, which one of the lectures in
Faculty Business and Accounting, i-CATS University College. This review article assignment
was given by her to fulfil the group assignment which consist of 20% marks. It was given
during week 10 of the class. The date for this assignment to be handed will be on week 13.

Principle of Auditing 1 assignment provided assessments for students in the form of

group assignment. In this group assignment, students have been requested in searching for
an article about the digital transformation of the audit. Additionally, the article that can be
used must be published 5 years recently. The lecture has provided some time for the student
to complete this assignment.

OBJECTIVES

The objective of the assignment is to enhance student skill in writing an creating an

article review in the proper way. The other objective is to provide extra knowledge about
advantage of digitization on internal auditing.

The article that we have chosen are from Mendeley. The reason why we choose
them because it is so convenient and user friendly. Most of the articles in this database are
completely accessible, making it simpler for students and other academicians to find the
materials they need. Additionally, Emerald Insight is a reputable company that administers a
portfolio of more than 300 periodicals, 2,500 books, and 1,500 teaching examples.

Figure 1: The Homepage of Mendeley

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THESIS STATEMENT: Impact of Digital Audit on Improving Performance Quality and
Reduce Costs and Applied Research in a Sample of Private Auditing Firms and
Offices

The title of the article that we choose is “Impact of Digital Audit on Improving
Performance Quality and Reduce Costs and Applied Research in a Sample of Private
Auditing Firms and Offices”. After found this article, we read it and try to figure out the article
about through the abstract. The purpose of the article is the impact of use of digital audit on
improving performance quality and reduce costs which are essential aspects of auditing. The
research aims at introducing digital audit, its goals and its impact on performance quality
improvement and cost reduction of audit. The research problem is ignoring the use digital
audit via Information Technology in auditing to avoid shortages of some huma resources and
hence affecting performance quality and costs. The most important recommendation
proposed by the researcher is training auditors efficiently utilize IT so as to save time and
efforts and to cut costs when carrying out audits.

Figure 2: The Article

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1.0 DISCUSSION

In this article review, there are a lot of discussion that will be deliberated and highlight
according to the article that I have chosen. The deliberation of the discussion will give
information to the reader to understand and read it easily without going through the
whole document. The following of the discussion will be written according to the given
guideline that have provided by the lecture.

1.1 Full Bibliographic Citation

Figure 3: The Full Bibliographic Citation

One of the most necessary elements for students to do article reviews is the
bibliographic citation. This is due to the fact that when students apply
bibliographic citations, the sources they used are dependable and important to
finishing the task at hand. The author, title of the journal article, name of the
journal, volume, issue, date of publication, and pages must all be included in the
bibliographic citation. All of this material is necessary for a quality article.

The author of this article is Imitihal Rasheed Batchai. The title of this article is
is “Impact of Digital Audit on Improving Performance Quality and Reduce Costs
and Applied Research in a Sample of Private Auditing Firms and Offices”. This
author is from University of Baghdad Raghad Rasheed Batchai. This article was
published on January 2022.

From my opinion, this article has fulfilled the bibliographic citation

characteristic that we need and the information in this article is still relevant.

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1.2 Intended Audience

The author will undoubtedly have their own intended audience while writing
any kind of post in order to communicate with them. Our understanding is that the
community of academics, Auditors and students is the target audience for the
authors of this essay. This is due to the fact that some ignore the use of digital
audit via Information Technology in auditing to avoid shortage of human
resources and hence affecting performance quality and costs.

1.2.1 Researchers

Figure 4: Example picture of students researching

The researcher needs seven references to complete their task

because they should just not copy another researcher's work. They can
benefit from this article since it is original, valuable, and covers methodology
and findings. They can use this article as further research-related knowledge
for them. The researcher might also refer to the analysis that is accessible in
this article.

1.2.2 Auditors

Figure 5: Example picture of Auditors

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 Financial auditors might experience an audit better and perform at a
higher level by receiving digital upskilling. When they received their
accounting degrees and entered the field, a group of PwC auditors didn't
realise how much more they could do with their accounting knowledge by
using modern technology abilities. This research can help auditors to
understand the depth meaning of this topic.

1.2.3 Students

Figure 4

The student also a good intended audience mostly from

information management. This is because they need to develop more
knowledge about auditing especially to all the students that are
studying in Accounting and Finance. For example, they can only use
this article when they need to complete their assignment task or for
future presentations. Hence, if they have that amount of reference
sources, they can produce high quality assignment and maybe
develop an interest to students.

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2.0 INTRODUCING DIGITAL AUDIT AND ITS GOALS

2.1 What is Digital Audit

The Digital Audit is a game-changer. It's a novel means of conducting the

audit as well as a novel way of considering the value of the audit. It requires re-
evaluating how and why your company offers audit services, and it creates a
completely new level of value for both your personnel and your audit clients in terms
of service.

A digital audit is a topic that receives a lot of discussion. In order to increase

efficiency and automate crucial procedures, auditors are indeed investigating and
applying digital innovation. However, a lot of people have the false idea that
automation and paperless audits qualify as "digitalization". The fact that nothing
about the audit process itself has changed as a result of the introduction of
technology is recognised by many audit companies. This indicates that the same
institutionalised ineffective and time-consuming procedures continue to be used. And
to make matters worse, a lot of auditors are still struggling to understand the
technology that guarantees more precise audit results, quicker, less laborious means
to access client data, and a better understanding of their client and their business.
Basically, auditors are using technology more as a step up from a pen and paper
than as a way to improve decision-making.

2.2 Research Problem

The research problem is non-utilization of digital audit and IT in audit firms

and offices to improve performance quality and reducing audit costs.

2.3 The goals according to the author

According to the author of “Impact of digital audit on improving performance

quality and reduce costs applied research in a sample of private auditing firms and
offices”. He gives out couple of goals that he wants other auditors or future auditors

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 to achieve. It is in terms of relevance, promptness, flexibility, clarity, continuity and
objectivity.

First goal would be relevance. It is important for the audit system to be

consistent to entity’s activity, size and objectives. Other than that is promptness, the
prompt infringements detection or prevention enables auditing to avoid their serious
negative impacts. Besides that, flexibility allows control systems to adapt to changes
witnessed by internal and external environment. Then there is clarity to make an
audit to be more efficient and effective or it must be clear and easily to understood to
both auditors and client or by those who is responsible for performance. After that,
continuity enables the audit to have the timely infringement detection, addressing and
for some correction. Lastly would be objectivity where auditing must be free from
personal factors that is personal judgment when measuring and evaluating
performance. Thus, the process of judging and evaluating performance is carried out
objectively not subjectively (Al-Sayrafi,2014).

3.0 DEFINING DIGITAL AUDIT IMPACT ON PERFORMANCE QUALITY IMPROVEMENT

In this article, it has mentioned the definition of digital audit impact on

performance quality improvement. Given the quick expansion of business, it is now
essential to use IT, particularly for IT-based audits (digital audits), which deliver fast,
high-quality data at an affordable price. The professional judgement problem, such as
human error, is addressed by digital audit in order to increase opinion quality and, as a
result, provide an accurate audit report. By taking advantage of technology
advancement, we emphasize the significance of digital transformation in work methods
and approach.

3.1 THE IMPACT OF THE PERFORMANCE QUALITY IMPROVEMENT BASED ON THE

FINIDNGS

Methodology

The lack of use of IT and digital audit in audit offices and organisations to increase
performance quality and lower audit costs is the research issue. The purpose of this
research is to introduce digital audit and its objectives. The next step is to define the
impact of digital audit on cost reduction and performance quality enhancement.

The research Hypothesis

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 In this article, the research hypothesizes that" utilizing digital audit leads to
performance quality improvement and cost reduce”.

Research Importance

From our observation, we find out the necessity of using IT for auditing through digital
auditing and examining its impact on performance quality improvement and, as a result,
audit cost reduction, give the study its worth. By creating effective audit methods and
gathering audit evidence, it allows auditors to give a balanced audit conclusion. As a
result, while auditing, relevant fair information is offered and relied upon.

Figure 5 Search Form

The Research Sample
Private auditing firms and offices, Iraq, Baghdad, for a year, 2020 Figure 1.

Digitization

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It is creating a digital image where the information included in a printed document is
converted to a soft copy saved on a computer, (Al-Salami, 2002, p: 57).

From the article, it had shown that digital transformation is the process an entity uses such
as IT, communication and Internet to upgrade its various activities and procedures and
transfer them to internal and external parties that need them.

This depends on the following elements:

1. Availability of data flow;

2. Use of IT;

3. Qualified human resources (Mohamed, 2002).

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Digital Audit (IT Audit)

WGITA- IDI, (2014, p:14) is testing the implementation of IT systems and the controls
applied to ensure meeting the work needs of the entity and keeping security, privacy, cost
and other significant work aspects intact.

Digital Transformation Objectives

In this article, it has clearly shown up that IT audits are conducted to ensure that IT
resources effectively advance company objectives and make good use of available
resources. Information systems, acquiring business solutions, system development, and
business continuity are all considered aspects of applying information systems, and an IT
audit may encompass these as well as assessing IT controls to ensure their correctness and
efficacy. assessing particular business operations that are connected. Accounting software
and internal controls. assessing the security and performance of the system. examining the
system and procedure development process. The advent of IT has altered the way we used
to operate. It helps us succeed and perform at the highest level. Almost everywhere now
uses computers. It is seen as a priority in the competition.

Competitive priorities are summarized below (Al-Shabani, 2010):

1. Reduced If optimally carried out, a reduced or reasonable cost constitutes an

or important competitive tool. It is defined as the number of resources
reasonabl spent to achieve a specific goal.
e cost:
2. Quality: This priority affects the entity's performance and continuity.

3. Time: Time is vital for decision making and the prompt response to client
needs.
4. Flexibility: Entity’s ability to change especially staff flexibility i.e. an entity has a
staff with diverse
experienced and skilled members.

5. Innovation: The rapid development, competitiveness and advanced technologies

that enable an entity to catch up with novel advancements,

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(a) Auditing is an essential pillar for an entity and it is an ongoing dynamic process.
Auditing needs informed procedures to ensure compliance with plans and policies on
which an entity relies in carrying out its operations .Auditing strikes a balance
between means and goals, efforts and results .Its aim is to realize consistency
between actual and planned performance.

(b) Auditing means reviewing the performance of someone by another .It is a kind of
verification whether everything is being carried out in accordance with the plan,
issued regulations and set principles. The purpose behind is to diagnose
weaknesses and errors in order to overcome and avoid them in the future (Al-
Quraishi, 2011)

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 We also observe from the article that digital audit should have the following
characteristics to be successful and goal-achieving: relevance, promptness, flexibility, clarity,
continuity, and objectivity. The audit system must be compatible with the entity's activities,
size, and objectives in order to be relevant. Infractions can be detected or prevented quickly,
allowing auditors to avoid their severe negative effects. Flexibility, or the capacity to change,
enables control systems to respond to alterations in the internal and external environment.
For the audit to be efficient and successful, it must be clear and simple enough for people in
charge of performance to understand. Continuous auditing allows for the prompt
identification, mitigation, and remedy of violations. In order to be objective, auditing must be
free from subjective judgments and personal considerations while assessing and monitoring
performance. Thus, the process of judging and evaluating performance is carried out
objectively not subjectively (Al-Sayrafi,2014) .

ISA 220- Quality Control for an Audit of Financial Statement-stresses the concept of
quality control as a set of policies and procedures applied in audit offices to verify that audits
are carried out in accordance with applicable audit standards (Standard (220),2019).

When the following criteria are accomplished, quality control is achieved. All
applicable auditing standards, codes of ethics, and quality control requirements must be
followed by auditors. Any inaccuracies and violations found in the financial statements must
be disclosed. Auditors should satisfy the demands and preferences of users of financial
statements. Audit quality is a useful tool for competition. However, due to its negative effects
on auditor independence, the breadth of audit processes, and audit quality, price competition
is seen as a concern for the auditing profession. Quality is an useful strategic instrument to
provide auditors a competitive edge in the market for audit services since the COHEN
Committee, in turn, issued a warning about the impact of competition on audit quality. It is
essential to create performance measures in order to evaluate audit quality.

A performance evaluation is defined as a digital representation of an entity's activity

and the outcomes that result from it, based on information about the nature of the activity,
the extent to which its goals are reached, and how it is developing. The financial statement
analysis technique first placed a focus on financial metrics based on the following theories: It
tries to gather important data on an entity's operations, effectiveness, profitability, and
hazards. Cost-analysis strategy: Given that one of the entity's strategic goals is cost

15
reduction, it seeks to achieve that goal. These methods do not adequately measure
performance due of the rapid advances seen in the workplace. In light of this, other metrics
like customer happiness, reputation, and the like are being employed. To conclude, financial
and non-financial measures need to be used together (Bosphorus, 2015).

The Practical Framework of the Research

The research is applied to a sample of private audit firms and offices Table 1.

Table 1
Depicts Details of These Firms and Offices
Detail Number
Audit Firms 20
Audit offices (class 1) 111
Audit Offices (class 2) 71
Source: researchers based on Board Of Auditing profession.

Shown in the article,in Iraq, there are 20 audit firms and 182 audit offices .61%of the
total number is listed in class 1 and 39% is in class 2. This is a positive indicator for example
there are entities specialized in auditing private sector. Table 2 depicts the audit experience
required for each class:

Table 2
Auditor Professional Experience
Class Category Professional Experience
1 A 15+ years
B 10+ years
2 C 5+ years
D Less than 5 years
Source: Board of Auditing Profession

We find out about professional experience is measured from the date the license was
granted, from the date of continuous professional work performed under the supervision of
an auditor with the consent and approval of the Board of Auditing Profession, or, in the case
of employment at the FBSA, from the date the scientific degree was obtained. Additionally,
auditors whose employment in government agencies and the private sector has been
authorized by a Board of Audit Profession ruling.

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To apply IT based audit which is digital audit, we selected two audit firms from class 1
categories A and B as depicted in table 3 – Traditional Audit Costs for firms A and B below.
The names of the firms are not disclosed for secrecy reasons and under both firms request:

Table 3
TRADITIONAL AUDIT COSTS FOR THE YEAR 2020
Detail Firm A Firm B
Amount / IQD Amount / IQD
Accountants’ salaries 90000000 66600000
Auditors’ salaries 228000000 144000000
Administrative services 14400000 9000000
salaries
Rewards 31200000 24600000
Indirect costs 108000000 86760000
Total 471600000 330960000
Source: the researchers based on the two audit firms.

From the table above, it shows the highest costs percentages for firms A and B (48% and
44% respectively) are for auditors’ salaries while the lowest for both firms is 3% for
administrative services salaries.

Using an IT-based digital audit system necessitates the purchase of an automated

operating system and software to audit inputs, processes, and outputs. the price of
educating auditors to use software, operating systems, etc. the price of current gear. the
price of recruiting IT specialists.

Digital auditing begins with planning the audit and concludes with drafting the report and
conveying the auditor's view using IT in partnership with the auditee. The audit company and
the auditee continue to be connected. Authorized individuals who are known to top
management of the auditee are in charge of updating information, and the audit firm is
directly alerted via the control over procedures.

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Financial Statement Digital Audit Procedures Table 4:

1. Checking inputs of financial Statements (financial statements and management report).

2. Verifying whether the entity complies with the Electronically Acceptable accounting
standards and
3. principles.
4. Verifying whether there are analytical statements for each account of financial
statements on the dual or
5. triple level.
6. Verifying the existence of electronic accounting entries, trail balances and accounting
records.
7. Verifying that electronic internal control reports are in place.
8. Verifying the electronic updating of accounts by the authorized persons, its date and
impacts on financial
9. statements.
10. Electronically verifying the accuracy of totals and balances.
11. Verifying controls over applications (input, rejection and processing).
12. Verifying the controls of operation completeness and reliability.
13. Verifying the corrective procedures concerning inputs, processes and outputs.
14. Verifying the signatures of persons authorized by law.
15. Verifying controls over outputs.
16. Electronically verifying controls Over Information Security and Quality.

Table 4
DIGITAL AUDIT COSTS FOR THE YEAR 2020

Detail Firm A Firm B

Amount / IQD Amount / IQD

Software Experts Salaries 15000000 14000000

Accountants’ salaries 36000000 266640000
Auditors’ salaries 91200000 57600000
Administrative services salaries 14400000 9000000
Rewards 32100000 24600000
Software Costs 7000000 7000000
Auditors and Accountants Training 20000000 20000000
Costs

Indirect costs 109200000 87760000

Total 324000000 246600000
Source: The researchers based on information provided by firms A and B

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The direct costs percentages for Firms A and B are 66% and 64% respectively and the
indirect costs percentages are 34% and36% respectively. The difference in costs between
traditional and digital audit is shown in the Table 5:

Table 5
DIFFERENCE IN COSTS BETWEEN TRADITIONAL AND DIGITAL AUDIT
Detail Firm A Firm B
Amount / IQD Amount / IQD
Traditional Audit 471600000 330960000
Digital Audit 324000000 246600000
Difference 147600000 84360000
Source: The researchers based on tables 3 and 4

As shown in the table 5, there is a decrease in the costs especially for auditors and
accountants salaries due to the use of IT based audit. Auditors and accountants number is
reduced and replaced by computers to carry out audits. It is worth mentioning that the two
firms incurred costs for purchasing the hardware but these costs are capital costs that are
made use of for more than one fiscal year and are included within inventory. Only
depreciation is accounted for. As for indirect costs, they are the costs of stationary, common
supplies, furniture depreciation, water and electricity fees and building rents.

According to the Board of Audit Profession, audit fees in firms in Iraq are basic audit
fees, supplementary audit fees, which are a rate of annual activity set by the Board of Audit
Profession, and basic fees are a lump sum of 1.5 million IQD if the firm, branch, or foreign
organisation has no capital.

Accordingly, the result of firms A and B activity is as shown in Table 6:

Table 6
TRADITIONAL AUDIT ACTIVITY RESULT FOR THE YEAR 2020
Capital Audit fees IQD
Less than 100 million IQD 1 million
Bess than 1 billion IQD 1.5 million
More than 1 billion IQD 2 million
Details Firm A IQD Firm B IQD

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 Audit revenues 518760000 357436800
Traditional audit 471600000 330960000
Activity result 47160000 26476800
Rate % 9% 7%
Source: The researchers based on information provided by firms A and B

As shown in table 6 ,the total profitable activity result rate for Firms A and B are 9%
and 7% respectively .The rate indicates that firm A performance and profitability are better
than those of firm B. Despite the fact that both firms achieved total profit, Firm A outperforms
firm B. As for digital audit activity result, it is depicted in Table 7:

Table 7
DIGITAL AUDIT ACTIVITY RESULT FOR THE YEAR 2020
Details Firm A IQD Firm B IQD
Audit revenues 518760000 357436800
Traditional audit 471600000 246600000
Activity result 194760000 110836800
Rate % 38% 31%
Source: The researchers based on information provided by firms A and B

Table 7 shows that total profitable digital audit activity result is greater than that of the
traditional audit by a difference represented by a percentage of 29% for Firm A and 24% for
firm B. This indicates that digital audit is better than traditional audit because its profitability
is greater than costs.

Building on the above, we can measure firms A and B performance quality as in table 8:

Table 8
Audit Firms’ Performance Quality For The Year 2020
Details Firm A Firm B
Profitability indicator
Traditional audit 9% 7%
Digital audit 38% 31%
Completion time indicator
Traditional audit 60 days per entity 90 days per entity

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 Digital audit 20 days per entity 25 days per entity
Cost indicator
Traditional audit A cost of 906923 per unit A cost of 924469 per unit
Digital audit A cost of 623077 per unit A cost of 688827 per unit
Source: The researchers based on the above mentioned tables and the information provided
by firms A and B.

The cost per unit = total cost / number of audit services

Number of audit services for firms A and B is 520 and 358 respectively

The tables mentioned above and performance quality measurement indicators

(profitability, completion time and cost) show that digital audit is better than traditional audit,
building on the realized results. Moreover, Firm A outperforms Firm B because it realizes a
total profit of 38% while firm B realizes a total profit of 31% .There is also a difference in the
completion time indicator in terms of audit service per entity .Firm An audit completion time
is 20 days per unit while firm B takes 25 days to complete its audit engagement .As for cost
indicator, firm A incurred a cost of 623077 IQD per unit while Firm B incurred a cost of
688827IQD per unit.

To sum up, because of its dependence on IT, digital audits have increased
profitability while saving time and money. IT aids in the timely delivery of pertinent
information, which helps audit companies offer an impartial technical opinion on the financial
statements using automated audit techniques in a high-quality and low-cost manner.

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4.0 LANGUAGE

According to our observation, we found that the language used by the author in the title
article is entirely English.As we know that one of the most widely utilized languages for
communication on a global scale is English.

4.1 The effect of the author’s language

Each sort of reader will find this article's usage of English to be simple.
Additionally, there are certain terminologies that are uncommon or hard to comprehend but
can still be helpful to readers. Even if some of the terminology, such as technical jargon, are
a little bit challenging to grasp, we can still understand this article.

4.2 The vocabulary and sentence structure

Following debate among the group members, we all agreed that the author's
use of word and sentence structure was adequate. This is due to the fact that, as readers,
we are still able to comprehend the information the author is trying to impart. The writers
make efforts to utilize clear English that will aid in the readers' comprehension and prevent
confusion.

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5.0 REFERENCES GIVEN

The author has used a number of reference materials to create a high-quality and
effective piece. This is done to make sure that the research that has been done and the
information that has been given are accurate and understandable.\

5.1 References section

According to what we've seen, the article's page 9 contains a section that lists
all the references the author has used. The author may cite sources relevant to his or her
study that concentrate on the “Impact of Digital Audit on Improving Performance Quality and
Reduce Costs and Applied Research in a Sample of Private Auditing Firms and Offices” In
order to prevent plagiarism in their paper, the author additionally uses in-text citations.

References

23
Text-citation

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6.0 EXPECTED RESULTS

We must clearly state what we hope to learn from the research in this part. Our
observations show that the author makes it very clear what is anticipated to occur in this
investigation. In this study, a sample of private auditing businesses and offices were used to
determine the effects of digital audit on raising performance quality and cutting expenses.
The author also discusses the characteristics or circumstances that could affect the results
of the study. Results measurement techniques are adequate and well-explained.
Additionally, predicted outcomes do occur. This is comparable to the following:

6.1 Applying digital audit to audit firms and offices improves performance quality of
audit engagements starting from planning and ending with report writing;

The author uses several practical frameworks of the research to proof that
applying digital audit to audit firms and offices improves performance quality of audit
engagements starting from planning and ending with report writing. In the research, Firm A
surpasses Firm B since it generates a total profit of 38% as opposed to 31% for Firm B
which compare to traditional auditing that Firm A generate profit of 9% and 7% for Firm
B.Digital audits have increased profitability while saving time and money. IT aids in the
timely delivery of pertinent information, which helps audit companies offer an impartial
technical opinion on the financial statements using automated audit techniques in a high-
quality and low-cost manner.

6.2 The proper design and sound implementation of financial statement digital audit
play an active role in reducing audit completion time to avoid weaknesses of traditional audit.

We can see from the table above that the researchers conducted a survey of
the firms A and B, which are from audit offices. And we discovered that, based on the actual
findings, the tables indicated above and performance quality measurement indicators
demonstrate that digital audit is superior than conventional audit. The completion time
indicator for the audit service provided for each organization varies as well. Firm A's audit is
finished in 20 days for each unit, while Firm B's audit is finished in 25 days.Which as a
confirmation of the proper design and sound implementation of financial statement digital
audit play an active role in reducing audit completion time to avoid weaknesses of traditional
audit.

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 6.3 Utilizing IT based audit saves effort and time and cuts cost.

The project is intended to take use of IT, which helps to expedite the delivery
of pertinent information, as the author has said in this paragraph. Additionally, it has been
argued that automated audit techniques would let audit companies provide unbiased
technical opinions about the financial statements in a high-quality, low-cost manner.

7.0. ACCOMPLISH OBJECTIVE

The author's goal, which was to examine how using digital audit may improve
performance quality and save costs—both crucial elements of auditing—was achieved in
accordance with the aforementioned objectives. In accordance with several of the methods
employed, the writers have accomplished what they set out to do. These methods do not
adequately measure performance due of the rapid advances seen in the workplace. Other
metrics like customer happiness, reputation, and the like are thus being utilised. In
conclusion, it is necessary to combine financial and non-financial measures.

8.0 RECOMMENDATION

According to what we have seen throughout the article, there are some
recommendations that have been included.

1. Auditors need to be trained to efficiently use IT to save time and efforts and cuts cost
when carrying out auditing engagements;

2. IT experts need to be hired to soundly carry out digital audit procedures;

3. Feedback needs to be relied upon to take proper corrective actions in the right time to
prevents and solve problems.

This article, in our opinion, deserves to be highlighted. This study examines how the
usage of digital auditing affects cost reduction and performance quality improvement, two
crucial components of auditing.

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9.0 CONCLUSION

Finally, as this essay contains some material that is relevant to students,

researchers, and auditors, we highly suggest it for those groups of individuals. They could
find all the facts they required in this article's analysis. Although this article has some
limitations, such as some sections not being stated clearly or not being included, it can still
be used as a supplement to other articles as a source of additional information.

In addition, we are hoping that this impact of digital auditing can be benefit to any
internal and external auditors in Malaysia. The goals of this study were likewise effectively
met, and the results are encouraging. Instead, this post had a positive influence on our
ability to learn about resource archiving.

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10.0 REFERENCES

Imtithal Rasheed Batchai&Raghad Rasheed Batchai. Impact of Digital Audit on

Improving Performance Quality and Reduce Costs an Applied Research in a Sample of
Private Auditing Firms and Offices, Academy of Accounting and Financial Studies
Journal,Volume 26, Issue 3, 2022,

Nur Fazerra Azren. Article Review(2018)

PricewaterhouseCoopers. (n.d.). Using audit technology and digital skills to innovate.

PwC. https://www.pwc.com/us/en/tech-effect/automation/audit-technology-and-digital-
skills.html

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