Continuous auditing: technology replaces tradition, but not people

While traditional auditing relies on periodic assessments, continuous auditing enables constant monitoring of financial and operational processes, providing greater transparency and the ability to identify risks in real time. With the help of technological solutions, continuous auditing will become a proactive tool, not just reactive, playing a crucial role in supporting strategic decisions and ensuring long-term financial transparency.

Early adoption of continuous auditing can provide SMEs with a competitive edge in the market

While multinational companies are often at the forefront of adopting advanced technologies, small and medium-sized enterprises (SMEs) face various challenges, such as limited resources and the need for specialised skills. Although SMEs represent a significant portion of the market in terms of the number of businesses, their process of adopting technological innovations tends to be more gradual and tailored to specific needs. Currently, many SMEs focus their resources primarily on day-to-day operations and regulatory compliance, planning the implementation of advanced technological solutions in a phased manner as organisational development allows.

However, early adoption of continuous auditing can provide SMEs with a significant competitive advantage. Even with limited resources, SMEs that implement continuous auditing can benefit from constant monitoring of financial and operational processes, helping them identify risks and make more informed and faster strategic decisions.

"SMEs can adopt continuous auditing by using affordable software solutions that automate monitoring and reporting processes. Additionally, partially outsourcing the audit or training internal teams to manage certain continuous auditing processes are viable options that allow SMEs to benefit from this tool without making significant investments," mentioned Marius Roman, Senior Manager, Audit & Assurance, Forvis Mazars in Romania.

Transition management is essential in implementing digital solutions to support continuous auditing

Auditors play a crucial role in supporting clients by helping them gain greater visibility into their activities, using artificial intelligence (AI) tools and digital transformation solutions. These technologies enable organisations to monitor and improve processes efficiently and in real time.

A significant example of technological progress in this field is the development of digital tools that facilitate the auditing process. For instance, the Forvis Mazars Count app, available on the Apple Store, simplifies the annual inventory process. This interactive app not only aids in documenting the audit but also facilitates the review of reconciliations and quick access to essential information, making it an important tool for both auditors and companies.

Roman adds: "Continuous auditing is beneficial both for those preparing reports and for auditors. It not only removes the pressure associated with critical reporting periods but also allows everyone involved to focus on the more dynamic aspects of their roles. By implementing a continuous auditing approach, companies can add value through enhanced visibility, and auditors can invest more in improving the quality of the services they provide. Whether continuous auditing becomes a reality depends on access to dynamic software solutions and the development of a solid implementation strategy."

Continuous auditing, a strategic partner that mediates the relationship between the company and the auditor

Continuous auditing becomes an essential strategic partner between the company and the auditor, facilitating continuous and efficient collaboration. In this context, auditors play a fundamental role in mediating this relationship, helping organisations understand how they can leverage technological solutions to achieve greater financial and operational transparency while ensuring alignment with ever-changing regulations.

By adopting continuous auditing, companies not only benefit from enhanced transparency in their financial activities but also gain a range of significant advantages that contribute to better risk management. Here are some of the key benefits of continuous auditing:

1. More agile strategies and faster decisions based on valid data

One of the biggest benefits of continuous auditing is the ability for organisations to make much faster and more informed strategic decisions. Instead of waiting for the annual audit to be completed, companies can obtain validated financial data in a much shorter timeframe as auditing processes are carried out continuously. This enables them to adjust their strategies and take corrective actions immediately, without having to wait for the completion of a financial cycle.

In contrast, with traditional auditing, there is a significant delay between the time when financial activities take place and when the final audit is available. These delays can cause decision-makers within the company to lose focus on critical aspects, as the data analysed by auditors pertains to a past period. Continuous auditing, on the other hand, helps organisations stay connected to the present reality, eliminating the gap between current economic activity and the audit process.

2. The auditor plays an active role in validating accounting approaches and quickly correcting errors

In a continuous audit, the financial auditor no longer plays just the role of a retrospective evaluator but becomes an active consultant. They can significantly contribute to validating the accounting approaches proposed by the company and quickly correcting any incorrect reasoning. In traditional auditing, correcting accounting treatments applied by the company can be extremely difficult and time-consuming, as the audit process takes place at the end of a financial year. At that point, the impact of errors may be hard to quantify and correct.

Continuous auditing allows auditors to intervene quickly when issues are identified in accounting treatments, thus facilitating a much more efficient audit process and contributing to ensuring higher quality in the final financial statements.

3. Improved compliance and collaboration with regulatory authorities

In an ever-changing legislative landscape, regulatory authorities are increasingly focused on the transparency and accuracy of financial reporting. The implementation of solutions such as RO e-Factura and SAF-T represents significant steps toward real-time data collection, facilitating not only accurate reporting but also the continuous auditing process. These tools help ensure that financial data is readily available for review, making it easier for auditors to monitor compliance and identify discrepancies promptly, while also aligning with regulatory requirements.

Although initially these new regulations were met with some reluctance by many organisations, they have represented an important first step in preparing for a continuous auditing process. By digitalising and automating reporting processes, companies can generate databases that are useful for auditing. After the audit is completed, these reports can become highly valuable tools for all their users, offering insights that improve decision-making and enhance overall transparency and compliance.

"In the process of implementing continuous auditing, it is essential that organisations not only focus on integrating advanced technologies and automating processes, but also on managing internal cultural changes. While technology plays a crucial role in improving transparency and efficiency, the success of implementation largely depends on how people adapt to the new solutions.

In an ever-changing work environment, organisations must integrate individuals from diverse generations – from Baby Boomers to Generation Z – each with different experiences and backgrounds. This represents both a significant challenge and an exciting opportunity.

Companies need to create an environment that supports continuous learning and effective collaboration so that every employee feels like an integral part of this transformative process. Therefore, businesses should invest not only in technology but also in managing these cultural transitions, encouraging professional development, and helping teams adapt to the rapid changes in the work environment. This balance between technology and people will ensure the long-term success of continuous auditing.", concluded Roman.