CONTINUOUS AUDITING.pdf

CONTINUOUS AUDITING
Ivan Cantu
College of Business Administration
University of Texas Pan American
1201 W. University Drive, Edinburg, TX78539
Tel: [phone] [e-mail] Lai Liu
College of Business Administration
University of Texas Pan American
1201 W. University Drive, Edinburg, TX78539
Tel: [phone] [e-mail] Haiyan Zhou
College of Business Administration
University of Texas Pan American
1201 W. University Drive, Edinburg, TX78539
Tel: [phone] [e-mail] ABSTRACT
As all true research efforts of a new research area such as continuous auditing, this exploratory study will examine the pros and cons of having continuous auditing for business organizations and explore audit models, including the Continuous Auditing and Financial Reporting (CAR),
Continuous Assurance Metrics (CAM), and Automated Continuous Transaction Verification
Environment (ACTVE) model. This study will have the implications for a business organization in the context of information quality, as well as implications for auditors and information users.
1. INTRODUCTION
The concept of continuous auditing has been around for at least a decade. According to
Canadian Institute of Chartered Accountants (CICA) and the American Institute of Certified
Public Accountants (AICPA), Continuous Auditing is defined as ―a methodology that enables independent auditors (both internal & external) to provide written assurance on a subject matter using a series of auditors’ reports issued simultaneously with, or a short period of time after, the occurrence of events underlying the subject matter‖ (Searcy and Woodroof, 2003).
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At the turn of the new millennium, the implementation of a continuous auditing system for business organizations has been taken into consideration, with emphasis in the corporate business environment. The Enron, Worldcom, and other corporate failures have given rise to the development and implementation of a continuous