What is continuous auditing?
Continuous auditing is the use of automated tests that run on transactions, balances and controls frequently, often daily or as data arrives, instead of only at period end or during an annual audit. Exceptions are flagged as they occur, so internal or external auditors can investigate them while they are recent and before they build up.
Also calledcontinuous monitoringcontinuous controls monitoringreal-time auditing
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- Runs
- Daily or as data arrives
- Output
- Exceptions for review
- Used most by
- Internal audit
How continuous auditing works
Auditors define tests and thresholds, such as duplicate payments, payments to new suppliers with changed bank details, journals posted by unauthorised users, or segregation of duties conflicts, and connect them to live data from the ERP and other systems. The tests run automatically and send exceptions to an owner for review, with the results logged as evidence. Internal audit teams use continuous auditing to cover more risk with the same staff; management uses the related practice of continuous monitoring as part of its own controls. External auditors can rely on the results only to the extent they test the design and operation of the monitoring itself. The main challenges are reliable data connections and tuning tests so they do not flood reviewers with false positives. MindBridge scores transactions continuously for internal audit and finance teams.
Common questions
What is the difference between continuous auditing and continuous monitoring?+
Continuous auditing is performed by auditors to gather evidence. Continuous monitoring is performed by management as part of its own controls. Both use automated, frequent tests on live data.
What can be tested continuously?+
Rules-based checks such as duplicate payments, supplier bank detail changes, unusual journal entries, user access conflicts, and payments outside approval limits.
Does continuous auditing replace the annual audit?+
No. External auditors still give an annual opinion, though they may use evidence from well-designed continuous controls testing as part of their work.
Continuous auditing software
Part of Accountio’s accounting technology coverage · Glossary
