Technical developments have always played an important role in the history of accounting and auditing practice. The Smart Computing Age urges us to rethink the way auditability of organizations is designed in an effective and efficient way. The goal of this conceptual paper is to define auditability on a general level and frame it as a design problem. It particularly addresses what is considered a key concern in auditing: What should be the ramification of missing or weak completeness controls on the external audit of financial statements? The paper introduces a general auditability framework that builds on the Dutch auditing tradition but is novel in the way this proven approach is summarized and formalized in a Five Cycle model. It makes an argument for a design role for the external auditor and gives directions how this role can be filled in, making optimal use of new technological possibilities.
- control infrastructure