What is Continuous Auditing?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 29 August 2019
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Continuous auditing is the idea that a company or business could get “real-time” financial information by a set of financial audits conducted simultaneously or in quick succession. This kind of financial system is generally more theoretical than practical for most businesses. This is largely because, in most cases, the cost of continuous auditing would outweigh the benefit.

Audits provide important financial data for a business. Audits help with error prevention, fraud prevention, and many other kinds of liability prevention. They also help provide a game plan for the future of a business or company.

A company could set up a continuous process for auditing using a variety of automated tools now available on today’s market. Continuous auditing should not be confused with continuous monitoring, a similar system where businesses can look at their financial processes in real-time. Lots of businesses are doing more work on continuous monitoring, where low cost methods may provide some advances in this kind of internal observation.

An easy way to think about continuous auditing or monitoring is the stock market exchange. Financial information on company stocks comes to investors in real-time, updated every few seconds. This kind of idea applied to an internal business structure could be called continuous auditing.


Many continuous auditing or continuous monitoring setups could theoretically provide a lot of value for a business. Seeing real-time results for internal financial processes can help business leaders make better decisions and recognize more profits over the long term. If the main costs of a continuous monitoring project are related to initial installation and planning, the system could become cost effective over time.

With new technology, continuous auditing and continuous monitoring are becoming much easier and more affordable for businesses. It’s likely that this trend will continue, and that future companies may be able to generate real-time reporting for lot of their financial systems. Consultants and others recognize a lot of promise in the idea of continuous auditing and similar goals. Much of this has yet to be translated to practical application, but the ideas involved are generally recognized as sound.

Most of today’s companies use audits on a quarterly or annual basis. Conventional audits show what has happened over the quarter or year. Businesses that want to enhance their financial reporting can look at various ways to implement new systems and ramp up their auditing abilities. In the future, this could include “continual auditing tools” that will show immediate results, and current values for business processes.


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