Abstract
Continuous Auditing, broadly defined as the transformation of internal and external auditing through the application of modern information technology, is being increasingly adopted by firms throughout the world. Organizations ranging from Siemens, HCA, the Royal Canadian Mounted Police, BIPOP Bank and the Internal Revenue Service are developing tools and practices that will bring assurance closer to the transaction and reduce through automation, the cost of auditing. A June 2006 PricewaterhouseCoopers survey finds that 50% of U.S. companies now use continuous auditing techniques and 31% percent of the rest have already made plans to follow suit. In this article we introduce the concepts of CA to a Brazilian audience and discuss its further application there. DOI: http://dx.doi.org/10.4301/s1807-17752006000200007
Highlights
The acceleration of information flows and the availability of online real-time enterprise systems had prompted the accounting profession to reconsider what an audit means and how it is carried out
As Elliot (1997 p. 64) states: “On-line reporting based on databases updated in real time will be less wedded to current protocols for periodicity, creating a parallel evolution toward continuous auditing
Continuous auditing may lead to continuous reporting that supplements and eventually replaces the annual audit report
Summary
The acceleration of information flows and the availability of online real-time enterprise systems had prompted the accounting profession to reconsider what an audit means and how it is carried out. The unique and unprecedented characteristic of such ERP’s as SAPTM is that they seamlessly integrates and automates business processes to achieve real time information flows. CA only achieves its full power, when it takes full advantage of this ability to automate business processes and integrate information flows to develop new real-time analytic procedures far more sophisticated and all-encompassing than anything in use currently. Official centers for CA exist in both the United States and the European Union, with practitioners and vendors (such as SAP, ACL, Caseware and Approva) outnumbering academic researchers as attendees at the bi-annual global CA conference Those practitioners include representatives of the major audit firms all of whom have ongoing CA initiatives. We conclude with an examination of the state of CA in Brazil
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