What are the main commonalities between continuous auditing and monitoring?
Both use technologies to test transactions close to the time at which they occur, to ensure they are in compliance with the controls that should be in place and to identify any transactions that appear to be in error or fraudulent. Typically this entails use of a suite of analytics that test all transactions against a comprehensive range of control rules. They also perform statistical and profiling analysis, looking for indications of risk and control problems that may not be addressed through existing controls. This could involve a trend analysis around payroll, identifying when pay rates in one department become unusually high, for example, or when payments are being made to employees who are terminated. The two approaches also complement each other. In fact, there is often an inverse relationship between the extent of continuous monitoring performed by management and the need for continuous auditing. For example, if management is actively monitoring transactions and controls across
