（2002）The Never-Ending Audit.docVIP

The Never-Ending Audit Can software prevent future Enrons? Peter Krass - CFO Magazine November 1, 2002 New developments in computer software could lead financial executives and accountants to completely change the way they conduct corporate audits. The question is whether that would be a good thing — and whether it could prevent the next Enron. So-called continuous-auditing software promises to transform the process of financial auditing by changing it from an archival activity that is performed at the end of a month, quarter, or year to a process that could be done on a continuous, nonstop basis. The promise is that this type of system could catch — and stop — illegal financial transactions before any damage is done. But critics of such software say it blurs the line between auditing and monitoring. Thats a line, they say, that few companies — or their independent auditors — wish to cross. Worse, in their view, is the idea — put forward by some proponents of continuous-auditing software — that the software could actually shut down an entire transactional system whenever it detected a major transgression. That, they fear, wouldnt just cross the line, it would obliterate it. Welcome the AuditbotEven if auditing software were pushed to this limit, could it stop the next Enron or WorldCom? Probably not, say experts. As Don Schulman, leader of the global financial-management solutions practice at PricewaterhouseCoopers Consulting, puts it: The CEO who wants to cheat and lie can take [a transaction] out of the system and tell the CFO to change it. For all that, the basic idea behind continuous-auditing software, sometimes known as auditbot technology, is fairly simple: A piece of software runs in concert with standard financial-application suites such as those offered by SAP, Oracle, and PeopleSoft, monitoring each transaction conducted by the suite and watching for violations of the companys rules and practices. (These rules are programmed in beforehand by the companys