Background
The objective of financial reporting is to provide information that is useful to management and stakeholders for resource allocation decisions. For financial information to be useful, it should be timely and free from material errors, omissions, and fraud. In the real time economy, timely and reliable financial information is critical for day to day business decisions regarding strategic planning, capital obtainment, credit decisions, supplier partnerships, and so forth. Advances in accounting information systems such as the advent of enterprise resource planning (ERP) systems have enabled the generation of real time information. However, the practice of traditional auditing has not kept pace with the real time economy. Traditional manual audit procedures are labor and time intensive, which limits audit frequency to a periodic basis, such as annually.
These time and effort constraints can be alleviated through the use of technology and automation. Continuous auditing enhances the delivery of auditing services by making the audit process more efficient and effective through the use of technology and automation. The increased efficiency and effectiveness of the audit process enables more frequent or real time audits and hence enhances the reliability of the underlying information.
Read more about this topic: Continuous Auditing
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