Addressing Continuous Auditing Challenges in the Digital Age

Abstract

Organizations face a challenge on the emerging technology-enabled businesses to prevent fraud and mitigate risks. Information technology (IT) advancements also provided the possibility of ongoing risk assessment and ongoing control assessment on the growing data volume in the digital age. Although organizations perceive the benefits of continuous auditing (CA) and continuous monitoring (CM), its adoption is low. Some barriers limit CA and CM adoption along with common challenges that organizations must face during implementation. This chapter provides a systematic literature review to promote CA and CM by presenting the main challenges in implementations and general guidance to overcome the identified challenges.

Continuous auditing in public sector and central banks: a framework to tackle implementation challenges

“…Given that we are focussing on CA, our paper is also related to the strand of literature that studies the CA systems. CA has been widely discussed from a theoretical viewpoint, although it has not been widely implemented in central banks [3], as several impediments limit its adoption along with typical challenges organisations face during its implementation (Cipriano et al , 2019).…”

“…Given that we are focussing on CA, our paper is also related to the strand of literature that studies the CA systems. CA has been widely discussed from a theoretical viewpoint, although it has not been widely implemented in central banks [3], as several impediments limit its adoption along with typical challenges organisations face during its implementation (Cipriano et al, 2019). The beginning of the academic debate on CA for private sector organisations dates back as far as the early 1990s, when it was defined as a system "designed to deal with the problems of auditing large paperless database systems" (Vasarhelyi and Halper, 1991, p. 110).…”

“…In other words, CA is likely to send early warning signals even though they would not be necessary. Chiu et al (2014), Eulerich and Kalinichenko (2017) and Cipriano et al (2019) propose interesting literature reviews on this topic. Their work is valuable for the diffusion of CA and continuous monitoring, by providing an overview of the state of the art in this field of study.…”

Continuous auditing and data mining for strategic risk control and anticorruption: Creating “fair” value in the digital age

“…However, the sample approach bears the risk of missing data about corruption activities in big data sets, and yearly or quarterly manual audits can have too large a lag between corrupt actions and ex ante control, which is unacceptable in the current economy of instant decision making (KPMG, 2018; Vasarhelyi et al, 2010, p. 20). Moreover, new technologies lead to new types of fraud and corruption schemes that are not detectable by traditional tools (Cipriano et al, 2019).…”

“…Although continuous auditing is very advantageous, its usage is still infrequent (Cipriano, Pereira, Almeida, & da Silva, 2019). Companies are not ready to actively adopt it because the concept remains vague.…”