An Exploratory Study on Auditing Standards for Embracing New Technologies: Remote Inventory Observation

ABSTRACT This study aims to bridge the gap between current auditing standards and regulatory requirements to incorporate emerging technologies into audit procedures. The demand for integrating new technologies into audit procedures, whether explicitly or implicitly, is evident. During the COVID-19 pandemic, auditors faced challenges participating in traditional physical inventory counting, a mandatory procedure according to current auditing standards. Consequently, they inevitably performed remote inventory observation using state-of-the-art technologies. Current auditing standards mandate physical attendance in most cases, yet auditors recognize the potential for remote inventory counting in certain scenarios, albeit subject to specific prerequisites. This study proposes amendments to current auditing standards to facilitate remote inventory observation, enhance audit quality, and mitigate the potential risks associated with adopting this approach. The deployment of robots (i.e., humanoids) in auditing is anticipated in the future. This study serves as a stepping stone to embracing the new technology of physical robots in auditing. JEL Classifications: M42; G18; G38.