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1 – 10 of over 103000Miklos A. Vasarhelyi, Michael G. Alles and Alexander Kogan
The advent of new enabling technologies and the surge in corporate scandals has combined to increase the supply, the demand, and the development of enabling technologies for a new…
Abstract
The advent of new enabling technologies and the surge in corporate scandals has combined to increase the supply, the demand, and the development of enabling technologies for a new system of continuous assurance and measurement. This paper positions continuous assurance (CA) as a methodology for the analytic monitoring of corporate business processes, taking advantage of the automation and integration of business processes brought about by information technologies. Continuous analytic monitoring-based assurance will change the objectives, timing, processes, tools, and outcomes of the assurance process.
The objectives of assurance will expand to encompass a wide set of qualitative and quantitative management reports. The nature of this assurance will be closer to supervisory activities and will involve intensive interchange with more of the firm s stakeholders than just its shareholders. The timing of the audit process will be very close to the event, automated, and will conform to the natural life cycle of the underlying business processes. The processes of assurance will change dramatically to being meta-supervisory in nature, intrusive with the potential of process interruption, and focusing on very different forms of evidential matter than the traditional audit. The tools of the audit will expand considerably with the emergence of major forms of new auditing methods relying heavily on an integrated set of automated information technology (IT) and analytical tools. These will include automatic confirmations (confirmatory extranets), control tags (transparent tagging) tools, continuity equations, and time-series cross-sectional analytics. Finally, the outcomes of the continuous assurance process will entail an expanded set of assurances, evergreen opinions, some future assurances, some improvement on control processes (through incorporating CA tests), and some improved data integrity.
A continuous audit is a methodology that enables independent auditors to provide written assurance on a subject matter, for which an entity’s management is responsible, using a series of auditors’ reports issued virtually simultaneously with, or a short period of time after, the occurrence of events underlying the subject matter.
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CICA/AICPA Research Study on Continuous Auditing (1999)
CICA/AICPA Research Study on Continuous Auditing (1999)
Companies must disclose certain information on a current basis.
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Corporate and Auditing Accountability, Responsibility, and Transparency (Sarbanes-Oxley) Act (2002)
Corporate and Auditing Accountability, Responsibility, and Transparency (Sarbanes-Oxley) Act (2002)
Il‐hang Shin, Myung‐gun Lee and Woojin Park
The purpose of this paper is to introduce the continuous auditing system based on continuous monitoring and its implementation methodology; also to present a systematic case study…
Abstract
Purpose
The purpose of this paper is to introduce the continuous auditing system based on continuous monitoring and its implementation methodology; also to present a systematic case study of actual continuous auditing systems implemented in the financial industry and the manufacturing industry.
Design/methodology/approach
The paper examines the method of implementing the continuous auditing system in the enterprise resource planning (ERP) environment, and suggests how the continuous auditing system can take firm root by looking at the successful introduction of the continuous auditing system in the financial industry and the manufacturing industry.
Findings
The proposed method of implementing the continuous auditing system has the 2stage approaches which can be applied to various kinds of companies in the ERP‐based environment. In addition, the proposed cases have the important practical implications acquired in the process of implementing the continuous auditing system in the financial industry and the manufacturing industry.
Practical implications
This study will help many corporations facing various types of corruption or circumvention of internal control, with their internal auditing, by showing them how to use the continuous auditing system to reinforce internal control. Also, it will make the independent auditor understand audited company's continuous monitoring system and lead to use the infrastructure for efficient and effective external auditing.
Originality/value
The proposed method and cases of implementing the continuous auditing system offer an innovative approach to auditing in the ERP‐based environment because it facilitates both internal auditor and external auditor to achieve the audit objectives efficiently and effectively.
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Munir Majdalawieh, Sofiane Sahraoui and Reza Barkhi
The pressure is on organizations to go beyond automating their internal audit activities and develop and integrate internal auditing into business processes of the enterprise…
Abstract
Purpose
The pressure is on organizations to go beyond automating their internal audit activities and develop and integrate internal auditing into business processes of the enterprise. This paper aims to propose a “full power” continuous auditing (CA) model with three key components: electronic audit evidence functions; intra‐process auditing; and inter‐process auditing.
Design/methodology/approach
This paper follows a design science approach by identifying relevant problems from the current literature, defining the objectives of the study, designing and developing the “full power” CA model, and evaluating the model. The model supports business process‐centric auditing and enhances the business monitoring capacities of organizations enabling the fulfillment of increasingly stringent compliance requirements with internal policies as well as external regulations.
Findings
This work has attempted to fill the gap between the enterprise solutions offered by enterprise system providers and a structured approach to auditing within enterprise environments by proposing the IIPCA model which combines the automated controls inherent in the systems with continuous audits based on electronic audit evidence. The approach provides for auditing both within and between processes ensuring comprehensiveness of the audit process.
Originality/value
The paper makes a contribution by proposing a “full power” continuous auditing model on the principle of continuous monitoring and with predefined building block components; facilitating the integration of continuous auditing within business information processing in an enterprise using different building blocks; and giving practitioners insight on the adoption of the CA in the enterprise and how it will enhance their audit effectiveness, and audit efficiency.
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Diep Duong and Norman R. Swanson
The topic of volatility measurement and estimation is central to financial and more generally time-series econometrics. In this chapter, we begin by surveying models of…
Abstract
The topic of volatility measurement and estimation is central to financial and more generally time-series econometrics. In this chapter, we begin by surveying models of volatility, both discrete and continuous, and then we summarize some selected empirical findings from the literature. In particular, in the first sections of this chapter, we discuss important developments in volatility models, with focus on time-varying and stochastic volatility as well as nonparametric volatility estimation. The models discussed share the common feature that volatilities are unobserved and belong to the class of missing variables. We then provide empirical evidence on “small” and “large” jumps from the perspective of their contribution to overall realized variation, using high-frequency price return data on 25 stocks in the DOW 30. Our “small” and “large” jump variations are constructed at three truncation levels, using extant methodology of Barndorff-Nielsen and Shephard (2006), Andersen, Bollerslev, and Diebold (2007), and Aït-Sahalia and Jacod (2009a, 2009b, 2009c). Evidence of jumps is found in around 22.8% of the days during the 1993–2000 period, much higher than the corresponding figure of 9.4% during the 2001–2008 period. Although the overall role of jumps is lessening, the role of large jumps has not decreased, and indeed, the relative role of large jumps, as a proportion of overall jumps, has actually increased in the 2000s.
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Philipp T. Schneider, Vincent Buskens and Arnout van de Rijt
Diffusion studies investigate the propagation of behavior, attitudes, or beliefs across a networked population. Some behavior is binary, e.g., whether or not to install solar…
Abstract
Diffusion studies investigate the propagation of behavior, attitudes, or beliefs across a networked population. Some behavior is binary, e.g., whether or not to install solar panels, while other behavior is continuous, e.g., wastefulness with plastic. Similarly, attitudes and beliefs often allow nuance, but can become practically binary in polarized environments. We argue that this property of behavior and attitudes – whether they are binary or continuous – should critically affect whether a population becomes homogenous in its adoption of that behavior. Models show that only continuous behavior converges across a network. Specifically, binary behavior allows local convergence, as multiple states can be local majorities. Continuous behavior becomes uniform across the network through a logic of communicating vessels. We present a model comparing the diffusion of both types of behavior and report on a laboratory experiment that tests it. In the model, actors have to distribute an investment over two options, while a majority receives information that points to the optimal option and a minority receives misguided information that points toward the other option. We predict that when adjacent persons receive misguided information this can hinder convergence toward optimal investment behavior in small networked groups, especially when subjects cannot split their investment, i.e., binary choice. Results falsify our theoretical predictions: Although investment decisions are significantly negatively affected by local majorities only in the binary condition, this difference with the continuous condition is not itself significant. Binary and continuous behavior therefore achieve comparable incidences of optimal investment in the experiment. The failure of the theoretical predictions appears due to a substantial level of error in decision-making, which prevents local majorities from locking in on a suboptimal behavior.
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Edwin A. Locke and Vinod K. Jain
Spurred by the globalization of competition, organizational learning and continuous improvement have attracted a great deal of research and managerial interest in recent years…
Abstract
Spurred by the globalization of competition, organizational learning and continuous improvement have attracted a great deal of research and managerial interest in recent years. Notwithstanding the growing literature on these topics, there is still considerable conceptual ambiguity about organizational learning and continuous improvement among researchers. The paper clarifies the underlying processes through which organizations “learn,” highlights the role of learning in continuous improvement programs, and shows how an organization may go about building a continuous improvement culture. Specific tools and techniques of organizational learning which may be used in continuous improvement programs are also discussed.
Zabihollah Rezaee, Ahmad Sharbatoghlie, Rick Elam and Peter L. McMickle
The digital economy has significantly altered the way business is conducted and financial information is communicated. A rapidly growing number of organizations are conducting…
Abstract
Summary
The digital economy has significantly altered the way business is conducted and financial information is communicated. A rapidly growing number of organizations are conducting business and publishing business and financial reports online and in real-time. Real-time financial reporting is likely to necessitate continuous auditing to provide continuous assurance about the quality and credibility of the information presented. The audit process has, by necessity, evolved from a conventional manual audit to computer-based auditing and is now confronted with creating continuous electronic audits. Rapidly emerging information technology and demands for more timely communication of information to business stakeholders requires auditors to invent new ways to continuously monitor, gather, and analyze audit evidence. Continuous auditing is defined here as “a comprehensive electronic audit process that enables auditors to provide some degree of assurance on continuous information simultaneously with, or shortly after, the disclosure of the information.” This paper is based on a review of related literature, innovative continuous auditing applications, and the experiences of the authors. An approach for building continuous audit capacity is presented and audit data warehouses and data marts are described. Ever improving technology suggests that the real-time exchange of sensitive financial data will place constant pressure on auditors to update audit techniques. Most of the new techniques that will be required will involve creation of new software and audit models. Future research should focus on how continuous auditing could be constantly improved in various auditing domains including assurance, attestation, and audit services.
Colm Heavey, Ann Ledwith and Eamonn Murphy
– The purpose of this paper is to develop and validate a new framework for continuous improvement.
Abstract
Purpose
The purpose of this paper is to develop and validate a new framework for continuous improvement.
Design/methodology/approach
The literature review on customer value and strategic quality provides the basis for the identification of a conceptual framework for continuous improvement. This conceptual framework is validated using the in-depth interview and the survey approach.
Findings
The empirical study concluded that the new framework contains all the core components or forces of continuous improvement. These forces are customer value focused co-leadership, customer value focused strategic objectives, improvement specialists with people performance knowledge and improvement methodology. By adopting this framework, all process personnel can have a role to play in process improvement leading to increased organisational returns on investment. Overall, it is an effective framework that is easily understood and can be applied throughout any process led organisation. This is supported by the empirical data.
Practical implications
This new framework can demonstrate to each organisational employee where they fit into the organisational continuous improvement strategy. This paper provides practitioners with a new validated continuous improvement framework that has application in all organisations that are involved in process customer value improvement. The researchers contend that this new framework can compliment existing continuous improvement frameworks.
Originality/value
This paper develops and validates a new framework for continuous improvement. By adopting this framework, all process personnel can have a role to play in process improvement leading to increased organisational returns on investment. This is supported by the empirical data. Also, the authors contend that this framework embraces the systems thinking approach (Conti, 2010) or systemic approach as people interact with customers, processes, improvement methodologies and each other to drive customer value improvement. Consequently, this generates a need to take global view of the combined effect of all customer value improvement components. This systems thinking can feed into future research.
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Mauricio Uriona Maldonado, Matheus Eduardo Leusin, Thiago Carrano de Albuquerque Bernardes and Caroline Rodrigues Vaz
Business process management (BPM) and lean management (LM) are both recognized for improving organizational performance through continuous improvement, yet their similarities and…
Abstract
Purpose
Business process management (BPM) and lean management (LM) are both recognized for improving organizational performance through continuous improvement, yet their similarities and differences have been poorly discussed so far. This paper aims to find their main differences and similarities using a systematic method for literature review.
Design/methodology/approach
The paper uses a structured literature review known as SYSMAP (Scientometric and sYStematic yielding MApping Process). The method integrates bibliometrics and content analysis procedures to perform in-depth analysis of the literature at hand.
Findings
Both methodologies seek continuous improvement with focus on the customer and process standardization, but they are divergent mainly in relation to the flow they intend to improve. The impossibility of implementing both methodologies in an effective way was also observed, mainly due to the differences they present in relation to how to achieve the continuous improvement cycle.
Research limitations/implications
As any other literature reviews, the major limitation is to have omitted relevant literature even though all available procedures have been used to avoid this situation.
Practical implications
This paper offers a novel perspective from the practitioner side. LM may be better used in human-intensive process improvement whereas BPM in technology-intensive ones. Such characteristics open up new opportunities for practitioners aiming at integrating both approaches.
Originality/value
This is the first paper that systematically analyses the body of literature of BPM and LM with the means to better understand their similarities and differences.
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