During the past decade there has been unprecedented business turbulence with corporate fraud and the subsequent corporate collapses, compounded recently by one of the worst periods of economic uncertainty in memory. It is hard to think of another time when there has been as great a need for assurance over the integrity of business activities, and for that matter, those of government as well.

The need for internal audit, a profession dedicated to providing assurance, is greater than ever and auditors are increasingly recognized as playing a critical role within the organization. Expectations are also rising that internal audit should be providing not only assurance over the business, but also the value-add activities that the profession has declared as part of its mandate.

But what does audit providing assurance mean? The literal definition of assurance, according to Webster’s, is “full confidence, freedom from doubt, certainty”. The Institute of Internal Auditors (The IIA) refers to the profession providing “assurance that internal controls in place are adequate to mitigate the risks, governance processes are effective and efficient, and organizational goals and objectives are met.” Therefore, the profession should provide organization’s confidence and freedom from doubt, over the effectiveness of risk management and controls.

Continuous auditing is one of the most effective ways to achieve confidence - freedom from doubt. Traditionally audit processes involve a cyclical auditing approach, along with some form of sampling and manual testing. Assessing a control at a particular point in time, reliance is placed on the effectiveness of the control throughout a period, backed up by some limited compliance and substantive testing.

By continuous auditing the entirety of what has actually occurred, auditors can provide a better level of assurance. Examining every transaction to determine whether it appears to comply with all of the controls that are designed to be in place and also checking if there is any indication of activities and risks for which no control was designed in the first place. This is the only way to provide this level of assurance.

Contact an account representative for more information.