Exploring Experiences and Perceptions of Executives Regarding the use of Continuous Auditing

Organizations are required to make well-informed and timely decisions in regards to financial and regulatory requirements to maintain compliance and financial stability. Performing traditional audits in a pristine evidentiary manner for financial reports and regulatory compliance was time consuming and crucial for making business decisions; therefore, business executives must evaluate and establish an audit methodology. Inaccurate financial information could result in false business reports, fraud, loss in shareholder value, or corrodes trust in capital markets. The escalation of fraud and financial inaccuracies is of major concern to business leaders. The legal and regulatory mandates of the Sarbanes-Oxley Act had resulted in executives reevaluating methodologies for maintaining organizational financial reporting and regulatory compliance. Business processes, controls, and best practices for continuous auditing in financial institutions are not consistent, resulting in diminished quality of corporate financial reporting. This qualitative, multiple-case study was designed to explore the practice of continuous auditing in support of financial reporting and regulatory compliance. The purpose of the study was to explore the perceptions and experiences regarding the use of technical tools and processes for financial audit reports. Participants were identified from the eastern United States, had experience with various audit leadership roles and responsibilities that may include (a) chief financial officers (CFOs), (b) chief executive officers (CEOs), (c) audit managers, (d) auditors, or (e) functional consultants who are experts in financial processes, had experience implementing continuous auditing solutions, and knowledge of continuous auditing, information technology governance, and financial operations. The results of this qualitative study found that there were different approaches in the implementation and use of new technology for continuous auditing. One common theme indicated executive management teams must understand the business impact and associated cost, training, and resources required to successfully implement a continuous auditing methodology. A continuous auditing approach is not suitable for all businesses and executives must evaluate their business processes and options to meet the regulatory mandates. Further research should include an analysis on the current options and tools available to make the paradigm shift to a continuous auditing methodology. As businesses grow globally, technology rapidly changing and business requirements becoming stricter with financial reporting, future research should include the latest options for auditing methodologies. Additional research would provide further information to business executives that could enhance their business strategy.