Continuous Auditing and Monitoring Implementation in Not-for-Profit Organizations: Can 21st Century Technologies Find a Home in More Traditional Organizations?

• In Event: Continuous Auditing

Abstract

There has been much public attention recently regarding fraud and abuse in the not-for-profit (NFP) sector (Washington Post, 2013). The NFP sector has been subject to increasing pressure to conduct its internal audits in a more effective and efficient manner. In this setting, with the resources available to the Rutgers Accounting Research Center (RARC), a project evolved that is studying the demand for and application of Continuous Auditing/Continuous Monitoring (CA/CM) techniques by these NFPs. Although many large organizations have already implemented and incorporated these CA/CM tools into their internal and managerial activities to some degree (Alles et al, 2008), this occurrence has not been that prevalent in smaller organizations. Historically, small-to-medium sized (SME) organizations have not had an opportunity to participate in the benefits of CA/CM due to cost/benefit concerns, a general lack of product designed and priced for smaller organizations, and a lack of technical expertise in the organization. The purpose of the RARC project is to create a benchmark for a CA/CM implementation plan designed by an external third party for SMEs, specifically NFP organizations. The intent of the project is to demonstrate that existing CA/CM tools and techniques can be suggested and employed by third party consultants or advisors to generate appropriate analyses in an SME NFP setting, as an “infancy stage” in a Grand Vision. Ultimately, the nirvana of CA/CM adoption, the Grand Vision, can fit in the business processes of a SME NFP.

Authors

• Miklos A Vasarhelyi, Rutgers, The State University of New Jersey, Newark

• Stephen Kozlowski, Rutgers, The State University of New Jersey

• Deniz A Appelbaum, Rutgers, The State University of New Jersey, Newark