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

Outline and compare frequentist view of probability and subjective Essay

Outline and compare frequentist view of probability and subjective view of probability - Essay Example Although experts like Frank P. Ramsey have referred to the frequentist methods more specifically and directly, the topic of subjective analyses has also been an important focal point in several academic debates. Building at least outlines of the frequentist and subjective views is thus necessary before embarking on a more detailed comparative analysis. Frequentist View of Probability Frequentist view of probability is relatively more common and popular perspective o probabilistic studies. According to Professor Norman Fenton, probability theory can be regarded as the body of knowledge which facilitates formal reasoning on uncertain events. Furthermore, Fenton states: â€Å"The populist view of probability is the so-called frequentist approach whereby the probability P of an uncertain event A, written P(A), is defined by the frequency of that event based on previous observations. For example, in the UK 50.9% of all babies born are girls; suppose then that we are interested in the eve nt A: 'a randomly selected baby is a girl'. According to the frequentist approach P(A)=0.509.† (Fenton, paragraph 1) Frequentist probability is therefore generally dependent on data collection and manipulation of available sample spaces, where a number of specimens and/or trial/error events can be observed. Contextually, Ramsey has stated that probability is of essential significance not only in the sphere of logic but also in the physical and statistical sciences. Academics and researchers cannot be sure in advance that the most functional interpretation of probability in logic will help in understanding the physical sciences too. The frequentative nature of probabilistic studies can thus be assumed as to have special stress on practical trial and error methods typical to most of the scientific and statistical research works. Subjective View of Probability Subjective view pf probability can be thought of as more affiliated to the philosophical antiquity of the subject. The su bjective view takes into account even the individual perspective of the observer with relation to an array of uncertain events. According to Albert (Paragraphs 3-4): â€Å"A subjective probability reflects a person's opinion about the likelihood of an event. If our event is "Joe will get an A in this class", then my opinion about the likelihood of this event is probably different from Joe's opinion about this event. Probabilities are personal and they will differ between people.† Therefore, subjective view is aimed at exploring the theory of probability from the viewpoint of an observer. Hence, it can be regarded as to have relativistic implications rather than practical fact finding approach. Comparative Analysis Similarities As early as 1926, Frank P. Ramsey pointed out the dualistic nature of understanding the subject of probability as a whole. He pointed out that there are two interpretations, those are subjective and objective views, related to the science and art of pro babilistic enquiry. In furtherance with such an approach, Ramsey (188-189) writes: â€Å"And in a sense we may say that the two interpretations are the objective and subjective aspects of the same inner meaning, just as formal logic can be interpreted objectively as a body of tautology and subjectively as the laws of consistent thought.†