Internal and External Audit Effectiveness in Fraud Detection through Continuous Auditing
Paul N. Onulaka, Khairy Mustaffa Said Kittanah · RePEc: Research Papers in Economics · 2015
In the age of real-time accounting and real-time communication, the current audit practices, while effective, often provide audit results long after fraud and/or errors have occurred. Real-time assurances can assist in preventing intentional or unintentional errors. This can best be achieved through continuous auditing which relies heavily on technology. These technologies are embedded facilities which are crucial to continuous auditing models. Moreover, the recent rash of corporate frauds and malfeasance has intensified the focus on continuous assurance as a viable enterprise risk-management tool. In line with this focus, this study explores the feasibility of implementing continuous assurance as a means of facilitating early detection of fraudulent activities as they occurred. This study adopted a cross sectional survey design using purposive sampling to ensure that only knowledgeable respondents were chosen. Kruskal-Wallis Rank Test statistical technique which is an extension of the Mann-Whitney U-test was used to analyse the data. The findings suggest that those firms that adopted continuous audit in conjunction with performing certain analytical functions in line with IAS 520 are better positioned to detect fraudulent practices as they occurred.