Putting Continuous Auditing Theory into Practice: Lessons from Two Pilot Implementations

ABSTRACT: In the almost twenty years since Vasarhelyi and Halper (1991) reported on their pioneering implementation of what has come to be known as Continuous Auditing (CA), the concept has increasingly moved from theory into practice. A 2006 survey by PricewaterhouseCoopers shows that half of all responding firms use some sort of CA techniques, and the majority of the rest plan to do so in the near future. CA not only has an increasing impact on auditing practice, but is also one of the rare instances in which such a significant change was led by the researchers. In this paper we survey the state of CA after two decades of research into continuous auditing theory and practice, and draw out the lessons learned by us in recent pilot CA projects at two major firms, to examine where this unique partnership between academics and auditors will take CA in the future.

[1]  Henry Mintzberg.  Musings on management. Ten ideas designed to rile everyone who cares about management. , 1996, Harvard business review.

[2]  Rick Elam,et al.  Continuous Auditing: Building Automated Auditing Capability , 2002 .

[3]  Robert K. Elliott.  Assurance Service Opportunities : Implications for Academia , 1997 .

[4]  Miklos A. Vasarhelyi,et al.  Financial Reporting and Auditing Agent with Net Knowledge (FRAANK) and eXtensible Business Reporting Language (XBRL) , 2005, J. Inf. Syst..

[5]  M. Vasarhelyi.  THE CONTINUOUS AUDIT OF ONLINE SYSTEMS , 1991 .

[6]  R. Elliott,et al.  Twenty-First Century Assurance , 2002 .

[7]  Miklos A. Vasarhelyi,et al.  Principles of Analytic Monitoring for Continuous Assurance , 2004 .

[8]  Miklos A. Vasarhelyi,et al.  Continuous monitoring of business process controls: A pilot implementation of a continuous auditing system at Siemens , 2006, Int. J. Account. Inf. Syst..

[9]  Miklos A. Vasarhelyi,et al.  Continuous Online Auditing: A Program of Research , 1999, J. Inf. Syst..

[10]  Carol E. Brown,et al.  A Review and Analysis of the Existing Research Streams in Continuous Auditing , 2007 .

[11]  Miklos A. Vasarhelyi,et al.  Feasibility and Economics of Continuous Assurance , 2002 .

[12]  A. Strauss,et al.  The discovery of grounded theory: strategies for qualitative research aldine de gruyter , 1968 .

[13]  M. Porter.  What is strategy , 2000 .

[14]  Marilyn M. Greenstein,et al.  Underlying principles of the electronization of business: a research agenda , 2003, Int. J. Account. Inf. Syst..