Continuous Auditing and XBRL

Continuous Auditing and XBRL

By Yigal Rechtman

Emerging technologies, such as eXtensible Business Reporting Language (XBRL), are poised to dramatically change auditing. Learn about the issues and opportunities associated with XBRL, continuous auditing, and the use of data mining for audit purposes by attending the June 15 continuing professional education (CPE) morning presentation organized by the Society’s Technology Assurance Committee.

XBRL is a web-based markup language that provides seamless transmission of financial information between companies and the financial community. Currently, paper documents and electronic document files require data entry or cutting and pasting to enter information into the recipient’s database. XBRL allows tagging of data so that it can be accepted directly into the recipient’s database for further analysis. This technology provides opportunities for cost savings and enables continuous financial reporting, which may eventually lead to online real-time performance reporting.

This CPE session will answer the questions: What are the implications of XBRL on continuous auditing? How does continuous auditing provide a more effective audit approach? How can data mining be used in a continuous auditing environment? How do emerging technologies, such as XBRL and data mining, impact the way that audits are performed?

Auditors can benefit from XBRL as it increases the opportunities to perform continuous auditing of financial information. Continuous auditing involves the evaluation of transactions simultaneous to, or shortly after, their occurrence. XBRL has the capability to populate auditor databases for immediate evaluation by auditors and their automated tools.

Statistical methods such as data mining can be used to identify high-risk transactions. Use of these innovations provides opportunities to improve audit effectiveness while creating training, staffing and information security issues. For instance, auditors will need training for using data-mining tools and evaluating results. A continuous audit requires auditors who have information system skills and a thorough understanding of statistical techniques. Strong security controls surrounding the transmission of data to the auditor and the auditor’s database are essential to continuous auditing.

Date: Tuesday, June 15
Time: 8:30 a.m. to 9:00 a.m.: registration, networking; 9:00 a.m. to 10:00 a.m.: CPE session
Presenters: Dr. Joseph O’Donnell, assistant professor of accounting at Canisius College; Karina Barton, accounting student at Canisius College; and Jennifer Moore, accountant with Lumsden & McCormick, LLP
Location: NYSSCPA new headquarters, 3 Park Ave. (at 34th Street), 19th floor, New York City

About the Presenters

Dr. Joseph O’Donnell, CPA, Ph.D., is an assistant professor in the Department of Accounting at Canisius College in Buffalo. He holds his doctorate and a master’s in business administration from the State University of New York at Buffalo. He earned his bachelor’s in business administration from the University of Notre Dame.

O’Donnell previously worked for what is now known as PricewaterhouseCoopers, as an information systems auditor and a financial auditor. He has written several articles for academic and professional publications covering information systems. A Society member, O’Donnell teaches courses in information systems auditing, e-business, enterprise systems and financial accounting.

Karina Barton is a student at Canisius College. She is completing a dual major in accounting and accounting information systems. A member of numerous academic honor societies as well as an associate student member of the Society, she has also been accepted to Canisius’ 150-hour master’s in business administration in accounting program. Barton is currently working on independent research in the area of XBRL.

Jennifer Moore is a graduate of Canisius College. She completed a dual major in accounting and accounting information systems with a minor in computer science in May 2003. Moore is a staff accountant with Lumsden & McCormick, LLP, in Buffalo, and a member of the Society.

Additional Information

This NYSSCPA/Foundation for Accounting Education (FAE) CPE morning presentation is free to NYSSCPA members and $15.00 for nonmembers to qualify for one hour of CPE credit.

At the session you will get the chance to network with the profession’s and the industry’s IT leaders.

Advance registration is encouraged, because seating is limited.

For additional information, contact Gary E. Carpenter at 315-487-4567 or gcarpenter-cit@worldnet.att.net or Bruce H. Nearon at 973-403-6955 or bnearon@jhcohn.com.

For more information on the Technology Assurance Committee, visit www.nysscpa.org, click on the Find Committees tab on the left-hand side of the page and then scroll down to the Technology Assurance Committee link.

Registration

To register: contact FAE at 212-719-8383 or 800-537-3635 or visit the Society’s website at www.nysscpa.org (you will need your Society member number to register). Go to the Technology Assurance Committee homepage and select “Continuous Auditing and XBRL” located within the “Free IT CPE” box.

Yigal Rechtman, CPA, CITP, CISM, is a partner with Person & Company, LLP CPAs, in New York City and is a member of the Technology Assurance Committee. The views expressed in this article are Rechtman’s and not his firm’s.