Academic journal article Auditing: A Journal of Practice & Theory

Forum on Continuous Auditing and Assurance. (Foreword)

Academic journal article Auditing: A Journal of Practice & Theory

Forum on Continuous Auditing and Assurance. (Foreword)

Article excerpt

Rapid advances in information technology have resulted in the adoption of complex information systems by corporate entities, such as Enterprise Resource Planning (ERP) systems, and in the conduct of business transactions and reporting over the Internet. Further, management and other stakeholders need more timely, continuous (real-time) information in order to cope with rapidly changing and competitive global markets. Today's information systems have the capabilities to provide this information. Naturally, these developments have a parallel effect in the area of financial reporting, where there is an increasing demand for more continuous reporting. This movement is recognized by the FASB and the SEC (1) and is further facilitated by the development of XBRL (eXtensive Business Reporting Language), which will allow financial information to be categorized electronically for dissemination and analysis. As with current financial reports, the value of continuous reporting will be integrally tied to the reliability of such information, thereby creating a demand for assurance services.

These major developments and trends raise a number of significant questions for auditing researchers and practitioners as we look to the future. For instance, how will we audit such complex information systems with linked business processes, controls integrally built into the system itself, and often an "audit trail" that is very difficult to observe or reconstruct? Will the audit need to move from an opinion on the financial statements to one on the process during which the financial information is compiled? If so, then what audit technologies and approaches will be needed? Will auditing need to move from an annual assurance to a continuous assurance? …

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