Hui Du

Meeting Challenges and Expectations of Continuous Auditing in the Context of Independent Audits of Financial Statements

This paper proposes a continuous auditing model that provides external auditors the opportunity to audit clients continuously or on a more frequent basis while reducing the possibility of compromising auditor independence. The model requires the auditors system to be separated from the auditees system so that the two systems do not interfere with each other. The auditors system must also communicate smoothly and effectively with the auditees system to continuously process data captured from that system. We show how the new technology using XML (eXtensible Markup Language) and CORBA (Common Object Request Broker Architecture) can help effectively connect the auditors system to the auditees system, thereby supporting smooth communication between the two independent systems. We also introduce the concept of continuous auditing cycle, which helps define the engagement period between client and auditor and makes the audit within each cycle continuous.

Is Compensating Audit Committee Members with Stock Options Associated with the Likelihood of Internal Control Weaknesses

We examine whether firms with a stock option plan for their audit committee members are more likely to have internal control weaknesses. Using a sample of 486 US firms, we find that firms with a stock option plan for their audit committee members are significantly more likely to report an internal control weakness than firms without such a stock option compensation plan. Our results support a UK government report which indicates that compensating outside directors with stock options may diminish the effectiveness of these directors. Our findings suggest that stock option compensation plans may adversely affect the functioning of a firms audit committee.

Are XBRL Files Being Accessed? Evidence from the SEC EDGAR Log File Data Set

ABSTRACT We provide evidence of whether users of financial reports are accessing XBRL files, the XBRL component of an SEC filing. The possibility of exempting small companies from the XBRL mandate ...