Harnessing the Power of Continuous Auditing ─ Developing and Implementing a Practical Methodology

Written to help auditors jump start their organization's near real-time financial data monitoring and sharing capabilities, Harnessing the Power of Continuous Auditing provides step-by-step instruction on how to build, market, implement, and manage a successful continuous auditing program.

Taking concept to reality, author and internal audit expert Robert L. Mainardi presents auditors, company executives, business unit managers, practitioners, and consultants with a complete road map to continuous auditing, from start to finish. Beginning with a thorough definition of the subject, Mainardi debunks the various myths surrounding the process including the most common misperception that the internal audit department must have the corresponding automated technology to support it and includes numerous documented proven techniques and instructions for more effective SOX work.

A vital tool to enhance the auditor's skills and abilities, Harnessing the Power of Continuous Auditing's exhaustive coverage includes:

• The definition of continuous auditing
• Where to begin
• Methodology development
• Preparing for continuous auditing
• Root cause analysis
• Action plans
• Problem-solving tools
• Lessons learned
• Selling continuous auditing
• Conditions and challenges

This all-in-one handbook of practical execution provides much-needed, accessible guidance on everything business professionals need to know to conduct and implement a successful continuous audit in their organizations.

ROBERT L. MAINARDI is President of Mainardi & Associates, a firm that creates, develops, facilitates, and administers custom training programs in auditing and risk; evaluates, creates, and implements formal audit methodologies; and consults on critical projects. Prior to forming his own firm, he was a vice president with the Penn Mutual Life Insurance Company. He has written over thirty-five courses focused on continuing education for professionals in the audit, operational risk and control, and accounting fields. He is also a Distinguished Faculty Member for the Institute of Internal Auditors and a featured speaker for the MIS Training Institute.

Preface.

Acknowledgments.

Chapter 1: Defining Continuous Auditing.

The Real Definition.

Differentiating Continuous Auditing.

Segregating Continuous Auditing and Control Testing.

Continuous Auditing Objectives.

Dispelling the Continuous Auditing Myths.

Summary.

Chapter 2: Where to Begin.

Recognize the Need.

Potential Need/Fit Considerations.

Client Relationship Score.

Summary.

Chapter 3: Continuous Auditing Methodology Development.

Continuous Audit Methodology.

Methodology Requirements.

Summary.

Chapter 4: Preparing for a Continuous Audit.

Building the Business Knowledge.

Developing Business Knowledge.

Understanding the Rules.

Identifying Technology.

Summary.

Chapter 5: Continuous Auditing: Foundation Phase.

Target Area.

Testing Objectives.

Frequency.

Testing Technique.

Summary.

Chapter 6: Continuous Auditing: Approach Phase.

Approach Phase.

Scope.

Volumes.

Sampling.

Criteria and Attributes.

Technology.

Summary.

Chapter 7: Continuous Auditing: Execution Phase.

Execution Phase.

Performance.

Exception Identification.

Summarizing Results.

Summary.

Chapter 8: Root Cause Analysis.

Root Cause.

Root Cause Defined.

Team Understanding.

Do I Need to Find Root Cause?

Root Cause “Why” Approach.

Root Cause Keys.

Summary.

Chapter 9: Continuous Auditing Reporting and Next Steps.

Reporting and Next Steps.

Reporting Options.

Advantages and Disadvantages of Report Type.

Reporting Options Summary.

Five-Component Approach.

Next Steps.

Summary.

Chapter 10: Action Plans.

Action Plans.

Addressing Root Cause.

Creating the Perfect Action.

Components of Real Action Plan.

Action Plan Tracking.

Summary.

Chapter 11: Continuous Auditing Conditions.

Conditions.

Business Unit Management Conditions.

Internal Audit Conditions.

Technology Conditions.

Summary.

Chapter 12: Selling Continuous Auditing.

Selling.

Business Unit Management.

Audit Team.

External Clients.

Summary.

Chapter 13: Continuous Auditing Challenges.

Challenges.

Internal Audit Department.

Client.

Summary.

Chapter 14: Continuous Auditing Uses and Users.

Uses and Users.

Uses.

Users.

Summary.

Chapter 15: Continuous Auditing Lessons Learned.

Lessons Learned.

Developing Technique.

Effective Concept.

Lessons Learned Template.

Summary.

Appendix: Continuous Auditing Guidance.

About the Author.

Index.