| Three recent developments challenge current auditing paradigms: sophisticated business systems, increased audit requirements, and unprecedented accountability and liability. New technology, which has revolutionized many facets of commerce and industry, provides an opportunity to meet these challenges and address the disparity between the technologically sophisticated auditee and the traditional paradigm auditor.; In this dissertation, I present CASSIE, a new technology-based real-time auditing paradigm. The underlying premise of CASSIE is to intercept in real-time copies of all input and output before they enter or after they leave the auditee's application processing facility, without affecting the dialogue between the auditee and its facility in any way. These data are immediately forwarded to an independent, auditor-controlled environment, CASSIE, for auditing, analysis, or storage. CASSIE is distinct from other auditing paradigms because it neither requires ongoing assistance from, nor consumes the resources of, the auditee or its information system. This independence allows the auditor to match the sophistication of the auditee's systems, adapt to changing requirements, and provide a higher level of assurance.; I also show that CASSIE is more likely than Anticipatory Auditing, a continuous auditing technique, to provide correct results when auditing the accrued interest payable to a bank's depositors. Further, I demonstrate that CASSIE provides more comprehensive information about the existence of unusual conditions in the audit population than does Anticipatory Auditing.; Finally, I discuss the implications of adopting a new auditing paradigm. First, the paradigm change alters characteristics fundamental to all audits. Second, the adoption of CASSIE expands the role of the auditor beyond the traditional attest function. Finally, the use of CASSIE requires changes in existing auditing standards since most of these were developed when periodic, after-the-fact auditing was the only option available. |
