Meeting Challenges and Expectations of Continuous Auditing in the Context of Independent Audits of Financial Statements

International Journal of Auditing, Vol. 11, No. 2, pp. 133-146, July 2007

14 Pages Posted: 22 Oct 2007

See all articles by Hui Du

Hui Du

University of Houston, Clear Lake

Saeed Roohani

Bryant University - Department of Accounting

Abstract

This paper proposes a continuous auditing model that provides external auditors the opportunity to audit clients continuously or on a more frequent basis while reducing the possibility of compromising auditor independence. The model requires the auditor's system to be separated from the auditee's system so that the two systems do not interfere with each other. The auditor's system must also communicate smoothly and effectively with the auditee's system to continuously process data captured from that system. We show how the new technology using XML (eXtensible Markup Language) and CORBA (Common Object Request Broker Architecture) can help effectively connect the auditor's system to the auditee's system, thereby supporting smooth communication between the two independent systems. We also introduce the concept of continuous auditing cycle, which helps define the engagement period between client and auditor and makes the audit within each cycle continuous.

JEL Classification: M49

Suggested Citation

Du, Hui and Roohani, Saeed, Meeting Challenges and Expectations of Continuous Auditing in the Context of Independent Audits of Financial Statements. International Journal of Auditing, Vol. 11, No. 2, pp. 133-146, July 2007, Available at SSRN: https://ssrn.com/abstract=1022789 or http://dx.doi.org/10.1111/j.1099-1123.2007.00359.x

Hui Du

University of Houston, Clear Lake ( email )

Saeed Roohani (Contact Author)

Bryant University - Department of Accounting ( email )

College of Business
Smithfield, RI 02917
United States

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