Benedetto Bongiorno CPA, CRE Lynford Graham CPA, PhD, CFE.

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Presentation transcript:

Benedetto Bongiorno CPA, CRE Lynford Graham CPA, PhD, CFE

 Continuous Audit As In Frequently Periodic To Continuous Monitoring  Development of Audit Expectations  Detection & Testing of Risks Controls  Extensive Use of Substantive Analytical Procedure (SAP)  Efficient Integration of SAP, Sampling & Testing of Controls

Review Documentation of Internal Control Review of Automated and Manual Controls Verification of Stationary Sequential Events Verification of Non-Stationary Sequential Events Independent ODBC /JDBC Connection to DBS Import Records For Current & Previous Periods Based On Company Operations, Combine Into Equally Spaced Events Days, Months, Quarters

 Segregate Records Into Financial Statement Segments - Assets, Liabilities  Segregate Segments Into Financial Statement Categories - Cash, Revenue  Segregate Categories By Debits and Credits  Segregate Debits and Credits By Sources of Transactions  Cross Reference Sources To Processes (Cycles)

 Segregate Sources of Transactions By Stationary & Non-Stationary Events  Reference Sources of Transactions By Automated & Manual Controls  Apply Appropriate Regression Model To Each Group  Establish Audit Expectations For Periods Under Audit  Update Documentation

 Based on Company and Industry Information  Works Best With Discrete, Sequential, Successive & Equally Spaced Data Produced With Automated Processes  Algorithms That Are Multifaceted Variations of ARMA  Different Models For Different FS Categories  Does Not Replicate History But Anticipates Results

Sequential Automated General & Administrative Expenses - Historical Debits {Period, Source, Monthly Total}, {{200601}, AP, 392,907.11}, {{200602}, AP, 416,209.05}, {{200603}, AP, 681,756.33}, {{200604}, AP, 541,760.38}, {{200605}, AP, 863,814.03}, {{200606}, AP, 518,772.63}, {{200607}, AP, 405,766.90}, {{200608}, AP, 483,285.86}, {{200609}, AP, 450,928.49}, {{200610}, AP, 437,524.51}, {{200611}, AP, 506,150.81}, {{200612}, AP, 792,556.24} Sequential Automated General & Administrative Expenses - Audit Expectation Debits {Period, Source, Monthly Total Expectation}, {{200701}, AP, 557,926.36}, {{200702}, AP, 546,124.97}, {{200703}, AP, 534,323.58}, {{200704}, AP, 522,522.20}, {{200705}, AP, 510,720.81}, {{200706}, AP, 498,919.42}, {{200707}, AP, 487,118.03}, {{200708}, AP, 475,316.65}, {{200709}, AP, 463,515.26}, {{200710}, AP, 451,713.87}, {{200711}, AP, 439,912.48}, {{200712}, AP, 428,111.09}

 Non Sequential Manual General & Administrative Expenses - Historical Debits  {Period, Source, Monthly Total},  {{200609}, AD, 509,152.15},  {{200612}, AD, 20,944.81}  {Period, Source, Monthly Total},  {{200604}, AL, },  {{00605}, AL, 14,970.82},  {{200609}, AL, }  Non Sequential Manual General & Administrative Expenses - Audit Expectations Debits  {Period, Source, Monthly Total Expectation},  {{200709}, AD, 265,048.48},  {{200712}, AD, 265,048.48}  {Period, Source, Monthly Total Expectation},  {{200704}, AL, 5,415.88},  {{200705}, AL, 5,415.88},  {{200709}, AL, 5,415.88}

 Is It Presently Used In Audits? [YES]  Is The Process Truly Continuous? [YES]  Is This a Silver Bullet For All Audits? [NO, Must Be Tailored By Specifics of Industry and Company ]  Is It An Efficient Way To Audit? [YES, Time Efficient & Cost Effective]  Is It a Effective Way To Integrate New SAS & AS Pronoucments Into Audits? [YES]