Keywords

continuous auditing; key risk indicator; internal auditing

Abstract

Despite research showing numerous benefits to continuous auditing, uptake by internal audit functions has been quite slow. Using field data from a multinational company, we study two possible reasons for the slow uptake of continuous auditing—the time it takes for continuous auditing to result in measurable reductions in audit risks and that not every type of risk is equally likely to improve from continuous auditing. Results suggest it takes three years before observing significant risk reductions from implementing continuous auditing. We also find that the benefits of implementing continuous auditing vary by risk factor, ranging in improvement from 0 percent to 51.6 percent for each additional year of continuous auditing use. These findings are important for internal auditors to understand to have a realistic expectation of the benefits and their limitations, as well as the timetable for realizing those benefits, when adopting continuous auditing.

Original Publication Citation

Eulerich, M., B. Fligge, V. L. Kasper, and D. A. Wood. 2024. Patience is key: The time it takes to see benefits from continuous auditing. Accounting Horizons, 2024. DOI: 10.2308/HORIZONS-2023-060.

Document Type

Peer-Reviewed Article

Publication Date

2024

Publisher

Accounting Horizons

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Full Professor

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