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Continuous Auditing. Items to be discussed include: Developing a Continuous Auditing Program Continuous Auditing Process Benefits of Continuous Auditing Continuous Audit Area Examples. Developing a Continuous Auditing Program. Level of Commitment and Effort. Management/Board Support
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Items to be discussed include: • Developing a Continuous Auditing Program • Continuous Auditing Process • Benefits of Continuous Auditing • Continuous Audit Area Examples
Level of Commitment and Effort • Management/Board Support • Should be a specific line item on your audit plan • This is not a one time project, but rather ongoing each year • Do you have the resources available to implement and sustain this program?
Selection of Automated Tool • Which tools are available? (i.e. ACL, IDEA, Access, SQL, etc.) • Are the funds available to purchase data analysis software, provide staff training, and annual maintenance support? • Do your research!
Technical Constraints • Disk space constraints • Direct access to databases (possible security concerns) • Dedicated platform for continuous audit testing (improves performance)
Staff Technical Proficiency and Knowledge • Does your staff have working knowledge of the processes of your organization? • Will you have to provide training to your staff on using the selected automated tool? • How well does your staff adapt to change?
Building Efficiency into the Continuous Auditing Process • Maintain balance in your continuous auditing program • As much as possible integrate with your normal audit process • Where possible completely automate testing (no manual intervention) • Strive to increase your “actual issue to testing script results” ratio to move closer towards 1.00 (minimize false ‘hits’)
Testing Development • All testing should be developed using automated scripts • Master list of continuous auditing ideas maintained and updated throughout the year • Automated testing scripts are developed during the normal audit process that can be integrated into the continuous auditing process
Testing Enhancement • Identified as part of the review process after results are validated • Reduces wasted time that may occur with reviewing false results • Helps to evolve and mature your continuous auditing program
Identification & Review of Results • Automated testing scripts are run on varying cycles (i.e. semi-monthly, monthly, quarterly, annually, daily, etc) • Results identified should be reviewed shortly after automated tests are performed • The time devoted to the review process should reduce over time as familiarity with the data and process increases and additional enhancements are added, as necessary
Documentation & Reporting • The method of documentation and reporting vary depending on the criticality of the issue identified • An engagement may be initiated based on issues identified during the continuous auditing process • As any item is identified in the process, these items are discussed and addressed by management
Continuous Auditing Benefits • 100% review of transactions for anomalies (no sampling) • Real time results • Greater audit coverage • Audit efficiency • Best way to develop knowledge about business processes
Continuous Auditing Areas • Accounts Payable • Payroll • Purchasing • Items that can be covered during every audit include: data anomalies and process inefficiencies • Industry specific areas (i.e. healthcare, manufacturing, government, etc.)
