Implementing Continuous Auditing in a Global Real Time Economy - PowerPoint PPT Presentation

About This Presentation
Title:

Implementing Continuous Auditing in a Global Real Time Economy

Description:

title: responsibility with authority: using the power of the purse to leverage the effectiveness of the board of directors author: michael alles – PowerPoint PPT presentation

Number of Views:102
Avg rating:3.0/5.0
Slides: 29
Provided by: Michael1849
Learn more at: https://raw.rutgers.edu
Category:

less

Transcript and Presenter's Notes

Title: Implementing Continuous Auditing in a Global Real Time Economy


1
Implementing Continuous Auditing in a Global Real
Time Economy
  • Miklos A. Vasarhelyi
  • KPMG Professor of AIS Rutgers University
  • Technology Consultant ATT Laboratories

2
Outline
  • The real time economy
  • Going Global
  • Measuring Business
  • Assurance in the Global Real Time Economy
  • Implementing Continuous Audit
  • Opportunities and Challenges

3
The Real Time Economy
4
The real time economy
  • The objective
  • Reduction of latency
  • Inter-Process Latency
  • Intra-Process Latency
  • The facilitators
  • Sensors measuring transactions automatically
  • ERPs
  • Process Automation
  • Dashboards
  • Reengineering, Outsourcing, System Integration

5
RTE
  • Processes that are supported by real-time systems
  • Processes which are monitored on a close to
    continuous basis
  • Processes that are highly time dependent
  • Processes where timely decisions give competitive
    advantage

6
(No Transcript)
7
Going global
8
Going global - Preamble
  • Over the last 50 years technology has enabled
    major motion towards a global economy.
  • Consequently it has set into motion social
    change, economic rebalancing, and an
    unprecedented degree of across-country
    cooperation.
  • However this phenomenon of ubiquitous consequence
    has created a wave of challenges to the
    socio-technical structure of business and
    corporate policy making.

9
Going Global - Friedman
  • 11/09/1989 (Berlin Wall)
  • 08/09/95 (Netscape went Public)
  • Three billion new people joining the fray
  • Work flow software
  • Open sourcing
  • Outsourcing, offshoring, In-forming
  • Hardware software multifuctionality
  • Tools of cooperation

10
Measuring Business
11
(No Transcript)
12
RTEBIS
  • Very rapid business cycles
  • Instant need of resolution of certain business
    needs (for example monthly billing may not be
    acceptable)
  • Service agreements that specify certain degree of
    data reliability
  • Rapid change in the terms of agreements
    contingent on dynamic parameters
  • Utilization of Service Oriented Architectures
    that allow for dynamic servicing of clients and
    dynamic acquisition of suppliers and service
    providers

13
(No Transcript)
14
Assurance in the Global Real Time Economy
15
What is Continuous Auditing?
  • No consensus on what constitutes a continuous
  • audit
  • Enhanced auditor skill set
  • Differences from traditional audit
  • New audit risk model
  • Continuous reporting and impact on auditors
  • report
  • Senior management support

16
A Distinction between Continuous Auditing and
Continuous Monitoring
Continuous auditing does not necessarily have to
generate a report it is a process that tests
transactions based upon prescribed criteria,
identifies anomalies, and is the responsibility
of the auditor. Continuous monitoring, on the
other hand, is the responsibility of management,
best defined in terms of the COSO Study control
framework. Continuous monitoring, when employed
by auditors, focuses on the control environment
and not transactions.
17
An evolving continuous auditframework
Continuous Audit
Continuous Audit
Continuous Control Monitoring
  • Automation
  • Sensoring
  • ERP
  • E-Commerce

Data
CA CCM C(D)A CA -gt Continuous Audit CCM -gt
Continuous Control Monitoring C(D)A -gt Continuous
Data Assurance
18
Unibanco Advances to Clients Monitoring
19
Overview of CaR-Lab examples
20
CAR-Lab Experiences
  • Control monitoring at Siemens
  • Transaction monitoring at Unibanco
  • Continuous (data) assurance at HCA
  • Other
  • Conceptual developments
  • Simulating Liberty
  • EBR work
  • KPMG projects

21
Implementing Continuous Audit
22
  • Background
  • While technologies of continuous audit have been
    extensively discussed and are progressively
    emerging the more mundane issues of their
    implementation in a socio-technical environment
    have been neglected
  • http//www.theiia.org/itaudit/features/in-depth-fe
    atures-2-10-08/feature-2/

23
2. Rule
  • Priority
  • Areas

6. Action and Reaction
3. Frequency
Audit Control Panel
5. Follow-up
4. Parameterization
Six steps of process implementation
24
Opportunities and Challenges
25
Opportunities for business and research (1)
  • Control system measurement
  • We are in a pre-paradigmatic stage of control
    documentation and measurement
  • We do not know how to monitor controls in large
    ERPs
  • We do not know how to provide a really
    supportable opinion on controls
  • We do not know how to rate combinations of
    controls
  • Business Process Monitoring and Alarming
  • Auditors have to carve a position on the new
    monitoring and control environment
  • Auditors can collect exception alarms as
    trusted parties and incorporate these into
    evidentiary matter
  • Auditors can be trusted

26
Opportunities (2)
  • Automatic Confirmation Tools
  • Confirmations will have an increased evidentiary
    role with eventual elimination of population and
    integrity worries
  • Intelligent confirmatory tags can do much
  • Database to database hand-shaking will be medium
  • Business opportunity for auditors
  • Audit bots (agents)
  • Many of the basic audit functions can be emulated
    by software
  • These must be eventually developed by the
    profession to work hand-in-hand with human
    auditors in the new audit world
  • These agents will work on all areas including 1)
    audit planning, 2) analytical reviews, 4)
    confirmations, and )5 evergreen opinions

27
Opportunities (3)
  • Collecting forensic trails
  • Auditor black box
  • Publishing real-time authenticated reports for
    different compliance masters
  • Publishing FD independent compliance reports

28
Challenges
  • Standards are needed for CA
  • Audit monitoring needs to be defined
  • Types of evidence are to change and must be
    reconsidered
  • Independence needs to be re-defined
  • The billing model has to be restructured to bill
    on function not hours
  • Audit firms must put improved knowledge
    collection and management processes to feed their
    audit analytic toolkit
  • Audit firms have to engage in auditor automation
    and pro-actively promote corporate data
    collection during-the-process
  • Value added must be justified in terms of data
    quality
Write a Comment
User Comments (0)
About PowerShow.com