Using Drones in Internal and External Audits: An Exploratory Framework

• In Event: SET Enterprise Models and Auditing Frameworks

Abstract

Recently the FAA lifted some restrictions on the use of drones or Unmanned Aircraft Systems (UASs) for commercial purposes with some restrictions. Markets for commercial drone use are in the technology trigger phase of the Gartner Group’s Hyper Cycle with developments occurring in real estate, agriculture (farming), the film industry, insurance and other areas. Auditing applications of drones in the sense of inspections have been proposed in heavy industry and cell tower inspection. Currently in the USA commercial users are required to apply for and receive a Section 333 grant of exception from the FAA. The FAA has issued a blanket grant of exception for all commercial flights below 400 feet for those users who have been granted a Section 333 exception. Heisey et al (2013) have proposed an initial software architecture to support nationwide commercial drone use. Alles et al (2008) proposed a structure for implementing continuous auditing (CA). In this paper their proposed structure is extended to include the additional requirements to add drone technologies. Their structure focused on adding CA software in ERP environments. This is extended by: 1) defining the use of drones in CA environments, emphasizing the continuous versus occasional use of drone technologies, 2) extending the technical CA architecture to include the use of drones, and 3) considering the types of drone usages amenable to both internal and external audits. A specific architecture is proposed here to prototype inventory counts in large warehouses or open-air inventories and which satisfies the proposed requirements. This proposal adds value to the current research by extending the discussion in the Alles et al (2008) paper to include the use of drones in continuous audit environments, by enumerating the usage types of drones in audit settings and by considering a particular prototype of such a system.

Authors

• Deniz A Appelbaum, Rutgers University - Newark

• Rob Nehmer, Oakland University