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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
• 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’)
Continuous Auditing Process
Continuous Auditing Process
• 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 Development
• 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
Testing Enhancement
• 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
Identification & Review of Results
• 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
Documentation & Reporting
Benefits of Continuous Auditing
• 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 Benefits
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.)
Continuous Auditing Areas
Automated Tools Demonstration
Any questions, comments, success stories?