（2006）A Framework for Independent Continuous Auditing of Financial Statements.pdfVIP

A Framework for Independent Continuous Auditing of Financial Statements Introduction In 1999, the joint study of the American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) defined continuous auditing “as a methodology that enables the auditor to provide assurance on a subject matter simultaneously with, or very shortly after, the occurrence of events underlying the subject matter.”1 The definition emphasizes two aspects of continuous auditing: its function as a methodology, and its use in independent audit. As a methodology, continuous auditing has attracted a significant amount of attention from researchers over the past three decades and, as a consequence, a variety of models have been developed to audit transactions continuously. In additional to the pioneering work on embedded audit modules (EAM) developed by Groomer and Murthy (1989), Vasarhelyi and Halper (1991) presented a “Continuous Process Auditing System” (CPAS), implemented at ATT, to monitor billings processed at its four large data centers nationwide. As new technologies advance in recent years, more and more continuous auditing models were developed in the continuous auditing literature. They include an Internet continuous auditing model within a debt covenant compliance domain (Woodroof and Searcy, 2001), a model to build continuous auditing capability through the “standardization” of transaction data (Rezaee et al., 2002), and a continuous auditing web services model for XML-based accounting systems (Murthy and Groomer, 2004). Continuous auditing is also positioned as a methodology for the analytic monitoring of corporate business processes, taking advantage of the automation and integration of business processes brought about by information technologies (Vasarhelyi et al., 2004). In 1 /members/div/auditstd/opinion/apr99_2.htm. See also Study Group (1999). the surge of corp