'Continuous auditing': The next trend in compliance?

While running internal audits has become a fairly common practice, some firms are taking it a step further.

A growing trend: continuous auditing. The Institute of Internal Auditors defines this process as any self-auditing efforts made on a “more continuous or continual basis.”

For many companies, however, it refers to auditing 100% of their transactions, processes, etc.

This usually involves:

• writing data-analytic scripts for areas to be audited, and
• merging the scripts with internal databases and reporting systems, as well as auditing software programs like ACL and Idea.

While this process can cost and time and money, there are several significant benefits.

For example, if your firm’s purchasing card policy allows widespread access for many small-dollar purchases, continuous auditing can go a long way toward identifying inappropriate purchases, unauthorized users, etc., that would likely slip through the cracks.

Added bonus: a safeguard against fraud. For example: The casino chain, Harrah’s Entertainment, has around 2,000 employees with access to key gaming systems. Automated continuous auditing allows the casino’s 86 auditors to spend more time doing surveillance on the gaming floor and preventing employee fraud.