Have you heard about continuous auditing, sometimes referred to as continuous compliance monitoring? But what is an ongoing audit? How is it implemented? And how do we select a technology tool to help with the job? Some companies, although it seems surprising, still do not use the auditing service. Because they are not required by regulatory bodies is one of the biggest reasons. So, before we talk about the tools for continuous auditing, it is worth first thinking that if your company begins its first audit, it is normal to consider how it should be minimally prepared, since there is an audit of financial, accounting, payroll, taxes, internal controls and numerous other information depending on the company profile.
In a first audit, more verification work is generally necessary, since it is the first time that the auditor evaluates your company. However, in subsequent audits, the level of verification tests may be lower, especially if the company's level of internal control is perceived as adequate by the auditor.
The auditor needs a series of basic accounting documents to carry out his work, which must be prepared before the start date of the auditing work. This list will constitute a checklist of the information to be verified. The necessary documentation varies from one company to another, but as a general indication, the company must have prepared, before the start of the audit, a copy of the articles of association and amendment of the articles of association, accounting balances, annual accounts at the closing date of the year, balance sheet, income statement, statement of changes in equity, statement of cash flows and company report, the list of tax settlement models for the audited year, as well as having updated the respective minutes books, both of the Board of Directors of Management and management of the General Meeting.
Continuous Auditing and what are its benefits Now, based on the fact that your company already has an auditing process, let's talk about continuous auditing, an idea that is becoming a reality and reducing some of the hassle of organizations that undergo one or more annual audits.
A continuous audit involves the continuous monitoring of systems and the collection of data and evidence normally required in an assurance audit, spreading all the time and workload over the year. With more regular check-ins from an auditor, to provide evidence that internal controls are implemented and working properly, an ongoing audit allows an organization to relinquish a traditional audit for a few years.
Continuous auditing spreads the auditing burden throughout the year. In addition, the more frequent monitoring of critical controls that is required is a benefit that helps prevent any breach of control during the year, which is not detected until the annual audit. Other benefits:
· Collecting audit evidence with less haste and effort;
· Better analysis of your controls through more frequent measurements and trends;
· Better alignment with the pace of change in highly dynamic environments;
· Use of automated compliance monitoring tools, which can help save time and resources in gathering evidence;
· Use of tools to help automate the collection of evidence and data, to execute trends and provide information.
And what is considered when implementing continuous auditing? If you're interested in the benefits of continuous auditing and implementation, the most important thing is to talk to your auditor and engage them from the start. Auditors are so integrated into the auditing process that their perspective is essential. If you don't involve them early on, you risk backtracking, because they don't understand the new process and how they can ensure that the data you're providing is accurate and complete.
Your auditor will make the transition with you. Then, by engaging you earlier, you can rely on your auditing expertise to answer questions and guide you in a way that still maintains your independence. The auditor helps with the transition process to a continuous audit, analyzes whether it is feasible for your organization, verifies what data your technology tool needs to collect, as well as its operation.
The next step should be to identify controls, which can be easily measured in a continuous auditing approach. Work with your auditor to identify when certain evidence can be collected and how often. Then, identify the tools that can support the process.
The use of auditing tools can significantly reduce the burden of gathering evidence. Organizations subject to many audits throughout the year will see a better return on investment by implementing continuous auditing tools. Examine the tools you can take advantage of for your specific auditing situation and needs. Implementing a continuous audit is a big transition, and starting small will allow you to continue developing resources over time.
When reviewing your options for an automated audit collection tool, there are several things to consider:
· Does the tool cover your technical environment? (For example, Google Cloud, local servers, etc)?
· Can it connect to the environment and extract data from it?
· Does it cover related technologies (e.g., endpoint protection, mobile device management, firewalls, vulnerability scanners, ticketing systems, registration, and audit monitoring)?
· Does it cover non-technical areas, such as safety awareness training solutions?
· Are your compliance standards simple to set up?
· What is the quality of the reports? Some tools don't satisfy what the auditor needs to understand the source of the information, such as the dates and times when the data was extracted.
· What configuration will the tool require to meet your auditing needs? What overload is associated with the tools? What does continuous tool management entail?
Finally, you need to determine if you are confident that the information the tool is collecting is complete. The tools should save you time and effort and make you more efficient. They shouldn't make your life difficult.
Most used tools for continuous auditing Continuous auditing tools are technological resources used to automate and facilitate the auditing process within an organization. They help auditors to continuously monitor financial transactions, identify unusual patterns, detect fraud, assess risks, and ensure compliance with internal regulations and policies.
Some common types of tools for continuous auditing include, for example, data analysis software. These programs allow auditors to analyze large data sets efficiently for irregularities, trends, and patterns. They can perform tasks such as duplicate detection, account reconciliation, and variance analysis.
Transaction monitoring tools are also used, as they track and monitor financial transactions in real time, identifying suspicious or unauthorized activities. They help prevent fraud and ensure the integrity of transactions.
Audit management platforms, on the other hand, provide a centralized structure for planning, executing, and monitoring auditing activities. They can include features such as customizable workflows, dashboards, and automated reports.
The robotization of processes (RPA — Robotic Process Automation ) is also being used in continuous auditing, automating repetitive and routine tasks and freeing up auditors' time to focus on more complex tasks with greater added value.
And currently, Artificial Intelligence and Machine Learning tools are also being increasingly used in continuous auditing to automate routine tasks, analyze complex data, and identify patterns not perceptible to the human eye. They help improve auditing efficiency and accuracy.
The use of tools for continuous auditing can provide several benefits, including reduced costs, increased efficiency, improved fraud and risk detection, and greater compliance with regulations and policies. However, it is important that organizations choose and implement the appropriate tools according to their specific needs and ensure effective integration with their existing systems.
If you would like to learn more about continuous auditing and how to implement continuous auditing, contact TATICCA. We are experienced independent auditors and accompany continuous auditing. We can advise on the strengths and quality of the tools unique to your situation.
A TATICCA Allinial Global Brazil it also provides integrated auditing, accounting, tax, corporate finance, financial advisory, risk advisory, technology, business consulting and training services. For more information, visit www.taticca.com.br or email taticca@taticca.com.br. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.
