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Continuous auditing and continuous monitoring offer organisations numerous benefits, such as improved risk management, greater efficiency and better compliance.

Continuous auditing and continuous monitoring

Continuous auditing and continuous monitoring offer organisations numerous benefits, such as improved risk management, greater efficiency and better compliance. However, there are also some challenges to overcome. Organisations should plan carefully and choose the right technologies to reap the benefits of these approaches.

Key information on continuous auditing and continuous monitoring

  • Continuous Auditing is a data-driven, automated audit process that checks data in real time or at short intervals to identify risks at an early stage and improve audit quality
  • Continuous monitoring is an ongoing monitoring process that continuously monitors critical business processes, IT systems and risks in order to immediately identify deviations, security incidents or rule violations.
  • The Advantages of using both approaches is greater efficiency and transparency, early detection of risks and vulnerabilities, and the ability to ensure compliance requirements and security standards in real time.
  • CA and CM are supported by artificial intelligence, but remain People at the centre of the decision-making process despite automation. AI relieves the burden by taking over repetitive, data-intensive tasks, but the final decision lies with humans.

Content on the topic of continuous auditing and continuous monitoring:

What are continuous auditing and continuous monitoring?

In today's fast-paced business world, where compliance requirements are constantly changing, traditional audit methods are often no longer sufficient. To help organisations proactively manage risks and ensure compliance, among other things, two concepts have become established: Continuous Auditing and Continuous Monitoring. The Differences between continuous auditing and continuous monitoring is the area that both methods deal with. While Continuous Auditing primarily focuses on the audit of the effectiveness of internal control systems, includes Continuous monitoring a broader area. In addition to auditing, continuous monitoring also includes the monitoring of processes, risks and compliance.

Presentation of the difference between continuous auditing and continuous monitoring

Definition of Continuous Auditing

Continuous auditing refers to an auditing method in which audits are no longer carried out at fixed intervals, but continuously and in real time. Data from various systems and sources is collected and analysed in order to identify potential risks and deviations at an early stage. The aim is to obtain an ongoing audit opinion on the effectiveness of the internal control systems.

Definition of Continuous Monitoring

Continuous monitoring is a more comprehensive approach that involves not only auditing, but also monitoring processes, risks and compliance. It involves collecting and analysing data from various sources in real time to detect deviations from defined targets or thresholds. Continuous monitoring enables organisations to react proactively to changes and minimise risks.

The importance of continuous auditing and monitoring for organisations

Continuous Auditing and Continuous Monitoring have a transformative effect on the way organisations manage risk and ensure compliance. They offer a proactive and data-driven approach that helps organisations achieve their goals and secure competitive advantage.

Advantages of continuous auditing in internal auditing

  • Recognising risks at an early stage: By continuously analysing data, potential risks and deviations can be identified at an early stage before they escalate into major problems.
  • Efficiency enhancement: The automation of audit processes leads to considerable time and cost savings.
  • Improved audit quality: By continuously analysing data, auditors can gain deeper insights into business processes and improve the quality of their audits.
  • Higher examination density: Automation allows more checks to be carried out, resulting in more comprehensive coverage of business processes.
  • Improved communication with management: By providing real-time information, auditors can take a more proactive role in supporting management.

Continuous monitoring for governance, risk and compliance (GRC)

  • Improved risk assessment: By continuously monitoring risks, organisations can refine and adapt their risk assessment.
  • More effective risk minimisation measures: The identification of risks in real time enables faster implementation of risk minimisation measures.
  • Ensuring compliance: Continuous monitoring helps organisations to ensure that they comply with all relevant laws and regulations.
  • Improved decision-making: By providing real-time data, organisations can make more informed decisions.

Challenges in implementing both approaches

  • Data quality: The quality of the data is crucial to the success of continuous auditing and continuous monitoring. Incomplete or incorrect data can lead to false results.
  • Technology: Implementation requires the selection and integration of suitable technologies, such as data analytics platforms and automation tools.
  • Organisational changes: The introduction of continuous auditing and continuous monitoring often requires changes in the organisation, such as a new allocation of roles and training for employees.
  • Cost: Implementation can require significant investment, especially for larger organisations.
  • Resistors: There can be resistance to change, both from employees and from management.

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Areas of application for continuous auditing and monitoring

Continuous auditing and continuous monitoring offer organisations a wide range of opportunities to optimise their processes and minimise risks.

Application examples in internal auditing

In internal auditing, continuous auditing and monitoring enable a comprehensive and efficient review of business processes. In addition to the areas already mentioned, such as finance, procurement and human resources, these approaches can also be used in other areas. In the Finance supports the continuous monitoring of financial transactions in recognising fraud and incorrect bookings. In the Human Resources can be used to ensure compliance with labour laws and collective agreements and to monitor access rights. With the use of IT systems IT security and compliance with IT guidelines can be checked. In connection with the area of Production production processes, quality assurance and compliance with environmental standards can be monitored. In co-operation with Suppliers their compliance with procurement guidelines and contract compliance can be checked.

Automated contract review with AI: compliance with regulatory requirements

AI-based systems are trained with large volumes of contract data and regulatory requirements. On this basis, they can:

  • Classify contracts: AI systems can automatically classify contracts according to type (e.g. purchase contract, service contract) and sector.
  • Extract relevant clauses: AI systems can extract relevant clauses, such as data protection provisions or competition clauses, from contracts.
  • Check contracts for compliance: AI systems can automatically check contracts for compliance with specific regulatory requirements.
  • Identify risks: AI systems can identify potential risks, such as contractual penalties or liability clauses.

AI-based continuous auditing: plausibility checks of access to files

AI systems are trained with historical access data to learn normal access behaviour. They can then recognise deviations from this normal state, for example:

  • Access outside the usual working hours: This could indicate unauthorised access.
  • Access to an unusually large number of files: This could indicate data exfiltration.
  • Access from unknown devices: This could be an indication of a security vulnerability.

Efficient control of processes through continuous monitoring

By continuously monitoring processes, organisations can not only minimise risks but also increase their efficiency. This is made possible by:

  • Identification of bottlenecks: By analysing process data, bottlenecks can be quickly identified and eliminated.
  • Optimisation of processes: Continuous monitoring makes it possible to optimise processes and eliminate unnecessary steps.
  • Improving quality: By identifying quality defects at an early stage, organisations can improve their product and service quality.
  • Quality management: Ensuring compliance with quality standards and the continuous improvement of products and services.
  • Risk ManagementAI-supported systems continuously monitor for risks, automatically trigger alarm chains and support decision-making for a fast and efficient response.

Monitoring and security in IT systems

IT security is becoming increasingly important in today's digitalised world. Continuous monitoring enables organisations to proactively protect their IT systems and minimise risks. This includes:

  • Detection of cyber attacks: By continuously analysing network traffic and system logs, cyberattacks can be detected and defended against at an early stage.
  • Protection of sensitive data: Continuous monitoring helps to ensure the protection of sensitive data and prevent data breaches.
  • Compliance with IT security standards: Organisations can ensure compliance with IT security standards such as ISO 27001 or NIST CSF.
  • Cybersecurity: Detection of cyber attacks and security breaches in real time.
  • Access control: Monitoring of user access and identification of unauthorised access.
  • Data integrity: Ensuring the integrity of data and protection against data loss.
  • Compliance: Ensuring compliance with data protection regulations such as the GDPR.
  • Backup monitoring: AI-supported systems proactively identify backup errors, reduce the risk of data loss and optimise compliance processes.

Compliance with industry standards

Many industries are subject to specific legal and regulatory requirements. Continuous auditing and continuous monitoring support organisations in complying with these requirements. Examples of this are

  • General:Proactively identify and adapt to changing regulatory requirements, such as CSRD, NIS2 and supply chain legislation, for continuous legal compliance.
  • financial industry: Compliance with Basel III, Solvency II and other regulatory requirements.
  • Healthcare: Compliance with data protection regulations (GDPR, HIPAA) and quality standards.
  • Energy supply: Compliance with environmental protection regulations and safety standards.

Methods and tools for continuous auditing and monitoring

The successful implementation of continuous auditing and monitoring is closely linked to the use of suitable technologies. These make it possible to analyse large amounts of data in real time, detect deviations and carry out automated audit procedures. The various tools for continuous auditing and monitoring often work closely together. For example, data from SIEM systems can be transmitted to a GRC solution in order to assess risks and initiate measures. Choosing the right tools for continuous auditing and monitoring depends on the specific requirements of the organisation. A combination of different tools can help to ensure comprehensive and efficient monitoring.

Automation through AI and data analytics

Artificial intelligence (AI) and data analytics play a central role in the automation of continuous auditing and monitoring. By using machine learning algorithms, organisations can:

  • Recognise anomalies: Deviations from normal patterns and behaviour are automatically identified, indicating potential risks.
  • Create forecasts: Based on historical data, future developments can be predicted so that proactive measures can be taken.
  • Recognise patterns: Complex correlations in large amounts of data can be uncovered to reveal hidden risks.

Software solutions for continuous auditing

A variety of software solutions are available for continuous auditing that are specifically tailored to the needs of organisations. The most important categories include

  • Governance, risk and compliance (GRC) tools: These tools support organisations in managing risks, complying with regulations and improving governance. They offer functions such as risk assessment, compliance management and reporting.
  • Automated audit software: This software automates repetitive audit tasks, such as collecting and analysing data.
  • Data analysis tools: With the help of data analysis tools, large volumes of data can be analysed quickly and efficiently in order to identify patterns and trends.

Tools for continuous monitoring of data and processes

The following tools are used to continuously monitor data and processes:

  • Security Information and Event Management Systems (SIEM): SIEM systems collect and analyse log data from various sources in order to detect and investigate security incidents.
  • Endpoint Detection and Response (EDR): EDR solutions monitor end devices such as PCs and laptops for suspicious activity and can react automatically if necessary.
  • Log data from firewalls, IDS/IPS systems and SIEM solutions: This log data provides valuable information about network traffic and can be used to identify security threats.
  • Results from vulnerability scanners and patch management systems: By regularly checking systems for vulnerabilities, organisations can minimise risks.

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Contact us to find out how your organisation can benefit from continuous auditing and monitoring!

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The role of humans in AI-driven auditing and monitoring

Despite automation, humans remain at the centre of the decision-making process. AI relieves the burden by taking over repetitive, data-intensive tasks, but the final decision remains with the human being.

Important principles:

  • AI relieved: The technology analyses large volumes of data and identifies anomalies.
  • People decide: Based on the information processed by AI, humans remain the central decision-makers.
  • Regulation guarantees security: The AI is developed and operated in accordance with the legal requirements.

The German AI Act stipulates that AI systems must not be the sole decision-making authority. They should support people, not replace them.

Presentation of the difference between continuous auditing and continuous monitoring

Conclusion: Continuous auditing and monitoring - future-proof and efficient

Continuous auditing and continuous monitoring are essential approaches for future-proofing organisations in a constantly changing business world. They enable proactive risk management, optimise the efficiency of internal processes and ensure adherence to compliance requirements. While Continuous Auditing focuses on auditing internal control systems, Continuous Monitoring expands this approach by continuously monitoring processes, risks and legal requirements.

By using modern technologies, especially AI, organisations can supplement traditional audit methods and take their auditing to the next level. The key here is to maintain the right balance between technological progress and human decision-making ability - always in line with regulatory requirements such as the German AI Act.

Continuous auditing and monitoring are therefore more than just tools - they are a strategic key to facing the challenges of digitalisation efficiently and securely and remaining competitive in the long term.

Caroline Schwabe
Latest posts by Caroline Schwabe (see all)

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