What is the effect of e-commerce on auditing Essay

What is the effect of e-commerce on auditing - Essay Example This development will impact all business disciplines. Therefore, auditors too will have to deal with the consequences that e-commerce will have on the auditing process. E-commerce can be defined as: "The use of electronic transmission mediums (telecommunications) to engage in the exchange, including buying and selling, of products and services requiring transportation, either physically or digitally, from location to location" (Greenstein & Feinman, 2000). One example of a company that is only working in an e-commerce environment is Amazon. This well-known company has become very successful with selling products like books and DVD's on Internet. However, soon this site became so popular that they expanded their product range to suit their customers. In addition to books and CD's also video games, software and electronics are being offered by this retailer online. The reason for this success of e-commerce businesses is dependent on their customers. Shopping online has been so convenient for a lot of people. One reason for this is that almost everyone is familiar with Internet nowadays. This is also true for companies. It has become very popular to use Internet, either at home or at work. This medium has made it very easy to access all kind of information online. This is called the move towards an Internet-based society (Turban, Lee, King, and Chung, 2000). This move has been triggered by technological developments. The explosive growth in information technology (IT) capabilities and the desire of businesses of all sizes to obtain competitive advantage have led to a dramatic increase in the use of IT systems to originate, process, store and communicate information (Tucker, 2001). In fact, Tucker (2001) mentions the importance of IT as follows: "there are few companies that don't rely on IT to achieve their auditing and accounting, operating and compliance objectives". Turban, Lee, King, and Chung (2000) mention the importance of technological changes in our society. For example, organizations changed their way of doing business and most consumers changed their process of buying. Chesher, Kaura, and Linton (2003) assign this development to new ways of processing information. In their view, new ways of processing information have made it possible for many businesses to expand and to exchange information in a more efficient manner. In order to keep up with competition, organizations have to rely on new forms of information technology. The use of new forms of information technology is expected to impact the auditing process within organizations. Therefore, Tucker (2001) mentions that it is rare to find an entity whose IT use does not also affect its independent audit. These technological changes also change the way that people work. Chesher, Kaura, and Linton (2003) also emphasize the impact of e-commerce on people. For example, if we compare employees of older generations with employees of today, we can see a different profile. Today, most employees that are working within an organization start their working day with checking their email. In this way, they can receive all the information easily and quickly. This activity has become a daily normal routine activity for most people given that Internet has changed the way of