Audit Analytics and Continuous Audit: Looking Toward the Future PDF
Preview Audit Analytics and Continuous Audit: Looking Toward the Future
A U D AICPA Assurance Services Executive Committee IT A N The mission of the AICPA Assurance Services Executive Committee (ASEC) A L Y is to assure the quality, relevance, and usefulness of information or its T IC context for decision-makers and other users by (1) identifying and prioritizing S a n emerging trends and market needs for assurance, and (2) developing related d C assurance methodology guidance and tools as needed. ASEC achieves its O N mission by: T IN AAUUDDIITT U providing guidance and leadership in identifying and prioritizing O U significant emerging assurance trends and market needs while engaging S A U users, preparers, and influencers toward action; D IT AANNAALLYYTTIICCSS developing assurance guidance by creating suitable criteria when necessary, and/or performance guidance, as appropriate; and communicating new assurance methodologies, guidance, and opportunities to our members and the profession on a global basis; and creating alliances with industry, government, or other specialized groups CCOONNTTIINNUUOOUUSS to improve CPA access to new assurance opportunities. For additional information on the AICPA’s Assurance Services Executive AAUUDDIITT Committee please visit aicpa.org/ASEC. Looking Toward AICPA Business Reporting, Assurance and Advisory Services Team the Future The overarching role of the AICPA’s Business Reporting and Assurance & Advisory Services Team is to provide leadership oversight, direction and visioning for emerging business reporting and assurance issues and initiatives that are identified and addressed through input from AICPA members, committees and staff. For more information on the Business Reporting, Assurance and Advisory Services Team initiatives, please visit aicpa.org/AAServices. aicpa.org | cpa.com AUDIT ANALYTICS 17970-344_Audit Analytics_final.indd All Pages 7/9/15 10:14 AM AUDIT ANALYTICS and CONTINUOUS AUDIT Looking Toward the Future 17970-344 17970-344_Audit Analytics_TitlePage.indd 1 7/9/15 10:16 AM NoticetoReaders AuditAnalyticsandContinuousAudit:LookingTowardtheFuturedoesnot representanofficialpositionoftheAmericanInstituteofCertifiedPublic Accountants,anditisdistributedwiththeunderstandingthattheauthor andpublisherarenotrenderinglegal,accounting,orotherprofessional servicesinthepublication.Thisbookisintendedtobeanoverviewofthe topicsdiscussedwithin,andtheauthorhasmadeeveryattempttoverify thecompletenessandaccuracyoftheinformationherein.However, neithertheauthornorpublishercanguaranteetheapplicabilityofthe informationfoundherein.Iflegaladviceorotherexpertassistanceis required,theservicesofacompetentprofessionalshouldbesought. Copyright©2015by AmericanInstituteofCertifiedPublicAccountants,Inc. NewYork,NY10036-8775 Allrightsreserved.Forinformationabouttheprocedureforrequesting permissiontomakecopiesofanypartofthiswork,pleaseemail [email protected],requestsshouldbe writtenandmailedtothePermissionsDepartment,AICPA,220Leigh FarmRoad,Durham,NC27707-8110. 1234567890SP198765 ISBN:978-1-94354-608-4 N R OTICE TO EADERS Thispublicationhasnotbeenapproved,disapproved,orotherwiseacted uponbyanyseniortechnicalcommitteesof,anddoesnotrepresentan officialpositionof,theAmericanInstituteofCertifiedPublic Accountants.Itisdistributedwiththeunderstandingthatthe contributingauthorsandeditors,andthepublisher,arenotrendering legal,accounting,orotherprofessionalservicesinthispublication.If legaladviceorotherexpertassistanceisrequired,theservicesofa competentprofessionalshouldbesought. iii TABLE OF CONTENTS Page Preface xi Acknowledgements xiii AuthorBiographies xv PartI Essays 1 ContinuousAuditing—ANewView 3 NancyBumgarner,MiklosA.Vasarhelyi 1.Introduction—ContinuousAssurancetheTheory 3 1.1ContinuousProcessAuditing 4 1.2ConceptualizingVariousElementsofCA 6 1.3GuidanceonContinuousAuditing 13 2.TheElementsofContinuousAssuranceRevisited 13 2.1ContinuousAuditingVersusContinuous Monitoring 13 2.2TheElementsofContinuousAudit 17 3.InformationTechnologyandtheAuditor 19 3.1EvolvingDatabaseAuditConceptualization 22 3.2IncrementalTechnologicalChange 23 3.3TheAuditDataStandard 24 4.TheNewContinuousAudit 26 4.1AssuranceLevel 28 4.2TimeFocus 29 4.3TimeInterval 30 4.4DataSource 31 4.5ChosenProcedure 32 4.6ChoiceofAssertion 33 4.7AnalyticMethod 33 4.8AssuranceEntity 35 5.QuestionsRegardingSomeAuditingConcepts intheModernEnvironment 35 5.1StochasticOpinionRenderinginaWorld ofStatistics 36 5.2NewAuditProducts 37 5.3Management,Control,Assurance,and OtherMeta-ProcessesConfusionofConcepts 38 5.4Independence 39 v CONTENTS Page 1 ContinuousAuditing—ANewView—continued 5.5MigrationofFunctionstoAutomation 39 5.6TheAuditEcosystem 42 6.Conclusions 46 6.1TheNewCA 47 References 49 2 TheCurrentStateofContinuousAuditingand ContinuousMonitoring 53 PaulEricByrnes,BradAmes,MiklosVasarhelyi Introduction 53 CurrentEnvironment 54 ProductsandServices 55 PromotionEfforts 56 SkillsRequired 57 SupplementalFindings 58 Conclusions 59 References 60 Appendix—ContinuousAuditingand ContinuousMonitoringinAction 60 Introduction 60 SAPKeyPerformanceIndicator 61 DSAS/AuditCommandLanguage 61 DSASDatabase 61 DashboardFeature 63 3 EvolutionofAuditing:FromtheTraditionalApproach totheFutureAudit 71 PaulEricByrnes,AbdullahAl-Awadhi,BenitaGullvist,Helen Brown-Liburd,RyanTeeter,J.DonaldWarren,MiklosVasarhelyi Introduction 71 ABriefHistoryofAuditingintheUnitedStates 72 TheTraditionalAudit 76 AutomatingtheAudit 77 TheFutureAudit 78 EmbeddedAuditModules 79 MonitoringandControlLayer 80 AuditDataWarehouse 81 AuditApplicationsApproach 81 vi CONTENTS Page 3 EvolutionofAuditing:FromtheTraditionalApproach totheFutureAudit—continued OtherFutureAuditConsiderations 82 Conclusion 83 References 84 4 ReimaginingAuditinginaWiredWorld 87 PaulEricByrnes,TomCriste,TrevorStewart,MiklosVasarhelyi Overview 87 Introduction:BlueSkyScenario 88 UsingTechnologytoTransformAuditing 91 TechnologyEnablers 91 AuditOpportunities 92 MoreEffectiveAuditDataAnalytics 92 MoreAssurance 95 AuditingWithBigData 96 ContinuousAuditing,ContinuousAssurance 97 MoreEffectiveFraudDetection 98 ReducingFalsePositives 98 AuditProcessRe-Engineering:AnExample 99 MakingItHappen 100 EncouragingAuditResearchandDevelopment 100 ProvidingGuidanceandUpdatingAuditing Standards 101 EncouragingandRecognizingNewResourceModels 101 BlueSkyScenarioRevisited 102 References 102 5 DataAnalyticsforFinancialStatementAudits 105 TrevorR.Stewart Abstract 105 TheAuditContext 105 DAandGenerallyAcceptedAuditingStandards 106 AuditApplicationsofDA 108 UnderstandingtheEntity,andRiskAssessment 108 PerformingSubstantiveAnalyticalProcedures 109 AnalyzingandTestingPopulationsof DetailedTransactionsandBalances 110 ConsideringandTestingforFraud 111 vii CONTENTS Page 5 DataAnalyticsforFinancialStatementAudits—continued TestingtheOperatingEffectivenessof InternalControl 112 Inquiry 112 ALookAhead:CognitiveComputingintheAge ofBigData 112 UtilizingBigData 112 CognitiveComputing 113 UppingOurGame 114 IllustrativeExamples 115 Example1:SimpleDAVisualization 115 Example2:FinancialRatioPeerAnalysis 120 MultivariateRatioAnalysis 125 References 128 6 ManagingRiskandtheAuditProcessinaWorldof InstantaneousChange 129 PaulByrnes,GerardBrennan,MiklosVasarhelyi,DaehyunMoon, SatyajeetGhosh Abstract 129 Introduction 130 CRMAArchitecture—Overview 130 CRMA—GeneralProcess 132 CRMA—MoreDetailedConsiderations 133 RiskIdentificationandAnalysis 133 KRIDevelopmentandImplementation 134 AuditorResponsetoChangingRiskLevels 136 ManagementResponsetoChangingRiskLevels 137 HypotheticalIllustrationofCRMAinUse 138 SystematicImplementationofRisk ManagementandAssessmentinaProcess 139 Conclusion 142 References 142 PartII Case Studies A DevelopingContinuousAssuranceatSiemens 147 AnnF.Medinets,JasonA.Gross,Gerard(Rod)Brennan TraditionalInternalAudit 148 ContinuousControlsMonitoring 148 viii CONTENTS Page B ImplementingContinuousAuditingandContinuous MonitoringinMetcash—Change,Capabilities,andCulture 157 GlenLaslett,CatherineHardy Introduction 157 ValueProposition:IdentifyingtheNeedand AddressingtheBusinessChallenge 158 TheImportanceofArchitecture 159 DefinitionsandApplicationsofCA/CMinMetcash 161 AnExampleApplication:TheLeave ContinuousMonitoringRoutine(CMR) 162 MovingForward—KeyRiskIndicators 163 ChallengesandLessonsLearned 164 Conclusion 166 References 166 C IncreasingAuditEfficiencyThroughContinuous BranchKPIMonitoring 169 CarlosElderdeAquino,EduardoMiyaki,NiltonSigolo,MiklosA. Vasarhelyi,PaulE.Byrnes Abstract 169 Introduction 170 TheProcessatSAB 170 PotentialEnhancements 171 Conclusions 172 References 172 D ImplementingContinuousMonitoringatVodafoneIceland 175 Mar´ıaArthu´rsdo´ttir,Ho¨rðurMa´rJo´nsson,SindriSigurjo´nsson Introduction 175 ContinuousMonitoringinVodafoneIceland 176 RevenueLeakage 177 ProcessofMonthlyFinancialClosing 178 TheBillingProcess 179 FraudMonitoring 181 CustomerRelationshipManagement 181 CultureChangeandEnhancedQualityof WorkFlow 182 ChallengesandLearning 183 TheFuture 183 Conclusion 184 ix
Description:The list of books you might like
