AUDIT ANALYTICS AUDIT

ESSAY 1
Continuous
Auditing—A New
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Nancy Bumgarner, CPA
Miklos A. Vasarhelyi, PhD 1
1. INTRODUCTION—CONTINUOUS
ASSURANCE THE THEORY 2
This volume is intended as an update on the report Continuous Audit
(also called Red Book) published by the CICA and AICPA in 1999. In that
volume, some basic principles and a vision were presented that served as
a basis for additional guidance work by the Institute of Internal Auditors
(IIA) in 2005 and the Information Systems Audit and Control Association
(ISACA) in 2010. Fifteen years after that 1999 report, this volume presents
a much different state-of-the-art, and this essay proposes an expanded set
of concepts largely adding to Vasarhelyi and Halper (1991) and joining it
with an increasing set of experiences and literature from practice and
academia. The evolution of IT, the emergence of big data, and the
increasing use of analytics have rapidly changed the landscape and
profile of continuous assurance and auditing. 3 Many of the current audit
1 The suggestions and contributions of professors Michael Alles and Mr. Shrikant Despante are
gratefully acknowledged. This essay also substantively benefited from the suggestions of Messrs.
Bob Dohrer, Chris Kradjan, Dorothy McQuilken, and Beth Schneider.
2 The authors are appreciative for advice and guidance from Professor Michael Alles, the comments
of Mr. Shrikant Deshpande, and the research assistance of Ms. Qiao Li.
3 In general the field of assurance incorporates both the traditional audit as well other types of assurance
such as SysTrust, WebTrust or assurance on cybersecurity. In this essay continuous assurance
is also taken as potentially a larger set of topics than providing traditional auditing services but on a
more frequent basis. On the other hand, the terms continuous audit and continuous auditing are used
interchangeably.
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