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

Abstract

This paper aims to bridge a gap in the literature by investigating a continuous audit case for anticorruption. The evolution of technology can offer valuable opportunities to integrate legality checks and business processes that are consistent with the growing call to fight corruption at the institutional level. Since the last decade, researchers have proposed conceptual frameworks demonstrating the visible advantages of continuous auditing and data mining, but significant difficulties still exist in practice. This process has been implemented in only a few cases, and the lack of empirical studies implies a need for additional research on this topic. To fill this gap, we adopt the framework proposed by Chan and Vasarhelyi (2011) and identify success factors for the implementation of continuous auditing. For the analysis, we use the research methodology of a single case study and focus on the Italian company Acciai Speciali Terni Spa (AST), the only steelwork company in Europe that has been ISO 37001 certified. This study demonstrates the practical impact of continuous auditing and data mining on strategic risk control by empirically testing the Chan and Vasarhelyi (2011) framework for the specific issue of anticorruption. The results show that effective continuous auditing is centered on an integrative and change management approach and that strategic vision, risk mapping, and a no-corruption culture are among the most influential factors. The AST case demonstrates that technology is currently essential for supporting strategic risk control but only if it is integrated with consistent growth in organizational and managerial capabilities.

Digitalization and prevention of corruption: Opportunities and risks—Some evidence from the Italian university system

“…Our work intends to contribute to the research strand, recently emerged, which explores the connection between digitalization and anti‐corruption policies (Adam & Fazekas, 2018, 2020; Cardoni, Kiseleva, & De Luca, 2020; Charoensukmongkol & Moqbel, 2014; DiRienzo et al, 2007; Inuwa et al, 2020; Khan et al, 2021; Park & Kim, 2020; Ponti et al, 2021; Shim & Eom, 2009; Sturges, 2004; Trittin‐Ulbrich et al, 2021). Digitalization and anti‐corruption policies represent two themes extensively studied in the economic literature, but ‐ in most cases ‐ very little in their possible interconnections.…”

“…But, while in principle the wide application of technology to public sector holds great promises in curbing corruption (OSCE, 2020; The World Bank, 2020), it also poses cause of concern (Adam & Fazekas, 2020; Park & Kim, 2020). Digital technologies can create new opportunities for committing and concealing corrupt behavior (Cardoni, Kiseleva, & de Luca, 2020). The implementation of digital tools faces specific obstacles and risks relating to issues such as digital inclusion, data privacy, and cybersecurity (UNDESA, 2020c), with possible corruption‐enhancing adverse effects.…”

“…Cardoni, Kiseleva, & de Luca, 2020). The implementation of digital tools faces specific obstacles and risks relating to issues such as digital inclusion, data privacy, and cybersecurity (UNDESA, 2020c), with possible corruption-enhancing adverse effects.…”

Anti-corruption disclosure quality and earnings management in the United Kingdom: the role of audit quality

“…Corruption has received massive attention over the past two decades due to scandalous corporate collapses [Blanc et al , 2019; United Nations Global Compact (UNGC), 2015] and associated societal problems and ethical dilemmas [Cardoni et al , 2020; Hauser and Hogenacker, 2014; Sanyal and Samanta, 2004; United Nations Global Compact (UNGC), 2015]. Transparency International (TI) defines corruption as “the misuse of authority for personal benefit” (Blanc et al , 2019; Errath et al , 2005, p. 7).…”

Driving and Inhibiting Factors for Implementing Audit Analytics in an Internal Audit Function

“…Although AA provides various opportunities, its implementation in IAF is considerably low (Cardoni, Kiseleva, and De Luca 2020;Gonzalez, Sharma, and Galletta 2012;Li et al 2018). Hence, there is a need to understand the driving and inhibiting factors for AA implementation (Eilifsen, Kinserdal, Messier, and McKee 2020;Michael and Dixon 2019).…”