Page 8 - Internal Auditor Middle East - December 2017

Knowledge Update

By Vishal Thakkar
Is audit ready for blockchain?

As demands from capital
markets and investors are
ever increasing for more
information about businesses,
there is no surprise that the
audit profession is keenly
looking at blockchain as this
could fundamentally change
the nature of auditing by
transforming supply chains,
payments and revenue
streams through the way it
documents and reconciles
complex and distinct
information from multiple
sources. Due to this, every
transaction could be shared
among trusted parties and
verified, providing increased
transparency, confidence
and trust, at the same time
increasing efficiency, as
the blockchain is regarded before the technology can meet business needs for blockchain
as a “central point of truth.” Also, through its almost real-time adoption:
reporting to the management, blockchain could provide access to - System confidence
quality data which current systems are not able to deliver.
- Audit strategies
These shifts may not happen in short span of time as implementing
blockchain will require significant investment in systems and - Financial accounting, reporting and legal standards
processes to meet its objective of creating a more secured, - Cyber and software auditing
transparent and efficient system, which eliminates the need for the
time-consuming financial checks exist today.
https://www.accountingtoday.com/opinion/is-audit-ready-for-
Following are few of the key considerations that need to be in place blockchain?feed=00000158-20c3-d6a2-adfb-70eb31330000

Ethics and the Internal Auditor

In the current unsettled situation, ‘ethics’ continues to be a and stakeholders have a significant level of trust in the internal
recurring conversation topic of corporate, shareholder, stakeholder audit function. Establishing a code of ethics is not as simple
and regulatory bodies. For internal auditors, ethics can be a very as it sounds. Some of the important attributes of ethics to be
delicate issue and political quandary while attempting to execute considered, by using the ‘EITHICS’ word as a mnemonic for the
their responsibilities and fiduciary duties. Internal auditors are following points:
often put in positions where they have to make difficult and E – Everyone is responsible T – Tone at the top is essential H –
sometimes uncomfortable inquiries as well. This can appear as an Honesty is the best policy I – Integrity is a must C – Corporate
attack on personal integrity or on personal morals and ethics of the social responsibility is expected S – Silence is not acceptable (or
management. silence is a form of acceptance)
Hence, a code of ethics is necessary and appropriate for internal http://misti.com/internal-audit-insights/ethics-and-the-internal-
audit profession. Ethics are grounded in the fact that management auditor

06 INTERNAL AUDITOR - MIDDLE EAST DECEMBER 2017