ACTVE: A Proposal for an Automated Continuous Transaction Verification Environment

Abstract

During recent years, there has been a significant increase in calls for corporate financial reporting transparency and for improved timeliness of financial information disclosures. To adapt to these changes in the financial reporting environment, auditors must look for methods and procedures to increase the effectiveness and efficiency of the audit process. Traditionally, a source of strong audit evidence has been the confirmation of an amount with a third party. Technology now exists to support the improvement and expansion of the confirmation process. To facilitate the timely confirmation of transactions and balances that involve external entities, this paper proposes ACTVE, an Automated Continuous Transaction Verification Environment. ACTVE is an interorganizational system by which data from an accounting information system can be electronically confirmed with a third-party's system. The system will provide timely audit evidence while significantly decreasing the transaction cost of obtaining confirmations. ACTVE will not only resolve confirmation response issues in today's audit environment, but will also support the new continuous assurance paradigm.

An Exploration of Bank Confirmation Process Automation: A Longitudinal Study

“…For example, as discussed in more detail below, electronic confirmations allow auditors to confirm account balances on a timelier basis while providing response authentication (Hanes et al 2014;Solieri and Hodowanitz 2016). In addition, Dull, Tegarden and Schleifer (2006) proposed an automated, continuous auditing confirmation approach using a clearinghouse for confirmation requests and confirmation replies.…”

Toward a New Business Reporting Model

“…Instead, there should be functionality to support ad hoc reporting. One type of ad hoc reporting would be only focusing on anomalies that arise from the continuous collection of data (Issa 2013;Dull, Tegarden, and Schleifer 2006;Chiu, Wang, and Vasarhelyi 2017).…”

Continuous audit model: data integration framework

“…In the literature, numerous studies use statistical tests and techniques to identify exceptions (DULL et al, 2006;MURTHY, 1989). The proposed methodologies are efficient in helping auditors to detect anomalies and exceptions (ALLES et al, 2006;DEBRECENY et al, 2003).…”