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Panel Discussion on Continuous Auditing

Panel Discussion on Continuous Auditing . November 3, 2006 Paul Penler, Executive Director Ernst & Young LLP. Thoughts Around Continuous Auditing. Challenges Approaches Audit Areas and Enabling Technologies. Companies, and their stakeholders, are not demanding

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Panel Discussion on Continuous Auditing

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  1. Panel Discussion on Continuous Auditing November 3, 2006 Paul Penler, Executive Director Ernst & Young LLP

  2. Thoughts Around Continuous Auditing • Challenges • Approaches • Audit Areas and Enabling Technologies

  3. Companies, and their stakeholders, are not demanding • Current focus is on eCommerce • Company assistance is critical • Routine changes to IT Systems • Concerned about security & confidentially • Customization required Challenges to Historical Continuous Auditing Model Cost / Benefit Companies • Benefits unclear • No “burning platform” • High cost • Lack of competing products • Industry leaders are not pushing the process • Auditing standards limit opportunities • Less than 50% of audit hours relate to substantive tests • Analytics not persuasive • Industry specific analytics need further development • Benefits to control testing is not clear • No “Silver Bullet” • Data capture unsolved • Infinite variety of client IT systems • Data mapping is time intensive • Volumes of transaction data make deployment difficult Technology Standards

  4. Alternative to Historical Model:- Continuous Monitoring by Companies • Clients’ develop/implement Continuous Monitoring Systems • Client’s rely on and test Continuous Monitoring Systems • Auditors evaluate, test and rely on client’s Continuous Monitoring System(s)

  5. Audit Areas Risk Identification Fraud Detection JE Data Analysis Subledger Data Analysis Confirmations System Evaluations Assurance Beyond F/Ss Internal Controls/404 XBRL Technologies XBRL Web and Web Services Pattern Recognition ERP Systems Enabling Business Rules Data Capture Automation Possible Audit and Technology Areas

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