An auditor is an individual who is authorized and permitted to examine a company’s financial records, transactions to ensure that they are legit with no errors. A continuous audit is a process built internally to examine information technology systems, verify the validity of accounting practices and enhance risk controls. Continuous audits are driven by technology and designed in a manner that automatically detects errors and verifies data. Continuous auditing has its disadvantages and disadvantages. However, auditors greatly benefit from the use of continuous audits as they help them to perform their jobs efficiently.
Continuous audits enable an auditor to identify frauds and errors immediately. This is because this process allows checking accounts in a detailed manner. The early identification of fraud or errors makes it possible to address the problem immediately. The continuous audit system enables auditors to plan their work systematically. For example, an auditor can create a work plan for an entire year which makes it easy to plan. It also helps an auditor prepare the interim accounts fast in companies that give interim dividends (Mainardi, 2011). The continuous audit system results in efficiency in the accounts department. The continuous audit also promotes security. An auditor is thus able to work efficiently not worrying about any breach of the accounts.
Delegate your assignment to our experts and they will do the rest.
The continuous audit system have potential problems which include the fact that it is very expensive and thus does not suit small-scale businesses. It entails the use of a lot of time, money, and effort. Continuous audits may also lead to unhealthy relationships between the clients and audits. This is because of the frequent visits that audits may make. Continuous auditing may also result in the monotony of work. This is because the auditor's work becomes mechanical. There is also a possibility of altering figures of the past work. This could ensue if a client’s staff tamper with accounts books after the auditor has checked them.
Reference
Mainardi, R. L. (2011). Harnessing the power of continuous auditing: Developing and implementing a practical methodology . John Wiley & Sons.
