Running Your Business Like an Olympic Athlete
Olympic athletes generally train every day – continuously monitoring their progress to make sure they're performing to the best of their abilities. Can you imagine an Olympic athlete training once a year and then trying to compete against those who kept to a strict, regimented training schedule? Like top athletes, successful businesses need to keep a constant pulse on how they're doing so they can address what's working and what needs to be tweaked – in order to always be on top of their game.
Companies can add value to their activities by utilizing Continuous Auditing and Monitoring, which is supported by tools and programs that can assist in mitigating risks and detecting fraud. Additionally, Continuous Auditing and Monitoring provides a powerful deterrent to those tempted to commit fraud, as these functions can take place frequently or continuously throughout the year.
- What are firms doing with Continuous Auditing and Monitoring? Continuous Auditing and Monitoring is in the developing stages. A few public companies are adding value by utilizing Continuous Auditing and Monitoring as part of their internal audit functions, allowing external auditors access to data with increased efficiency. The white paper cites an example of Continuous Auditing and Monitoring implementation at The Hewlett-Packard Company. In terms of external audit applications, opportunities remain to capitalize on this developing area.
- What Continuous Auditing and Monitoring products and services could firms provide? Continuous Auditing and Monitoring consists of many diverse elements and may be implemented at various levels of sophistication. Specific opportunities include converting from manual to automated data, controls and processes; designing controls around processes; formulating tests and monitoring routines; dispensing operational risk management services; and providing full service packages including tools, installation, setup, training and maintenance.
- Do firms have the necessary internal expertise to provide the array of Continuous Auditing and Monitoring options? What is the desired skill set for implementing such services? When the accounting firms involved in this study reflected upon key competencies required to perform Continuous Auditing and Monitoring, they found that their staff was qualified in many of the areas listed, including audit foundation, knowledge in statistics, data analytics background, knowledge of business processes, controls and inherent risks, professional skepticism and judgment. As Continuous Auditing and Monitoring is a complex area utilizing numerous competencies found throughout a firm, it is expected that initial Continuous Auditing and Monitoring projects would likely be completed by cross-functional teams. Because Continuous Auditing and Monitoring is a developing area, ongoing education will be needed to keep involved individuals informed of new concepts, trends and technologies in auditing and accounting.
Like an Olympian training all year long to reach their goal of a gold medal, businesses need to be continuously monitored to operate effectively. Continuous Auditing and Monitoring may just provide an opportunity for businesses to demonstrate their strength, efficiency and accountability while providing a venue for firms to develop new expertise and services.
Educate yourself and your staff on the potential values to be found in Continuous Auditing and Monitoring by reading the AICPA’s new white paper, The Current State of Continuous Auditing and Continuous Monitoring.
Brian Fox, CPA, MBA, President & Founder of Capital Confirmation Inc. Brian served as a member of the AICPA’s Task Force for the Future.