Design and evaluation of an advanced continuous data level auditing system: A three-layer structure

Kyunghee Yoon, Yue Liu, Tiffany Chiu, Miklos A. Vasarhelyi

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


Audit efficiency and effectiveness can be significantly affected by data aggregation during audit procedures. Previous studies highlight that an appropriate level of data aggregation is needed because a continuous auditing (CA) system often generates numerous alarms. To respond to this issue, this study proposes a CA system with a three-layer structure. In the first layer of the proposed system, all journal entry level transactions are classified and aggregated using defined rules; any transactions that deviate from these rules are identified as unusual transactions. The second layer detects the observations that violate controls. Analytical monitoring models are developed in the final layer to identify observations that statistically deviate from an organization's typical business behaviors. To examine whether the proposed three-layer CA system enhances the effectiveness of a CA system in identifying financial irregularities, this study empirically tests the proposed models using real-world journal entry data from a construction company. The results indicate that the proposed framework enhances audit effectiveness and efficiency.

Original languageEnglish (US)
Article number100524
JournalInternational Journal of Accounting Information Systems
StatePublished - Sep 2021

All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Accounting
  • Finance
  • Information Systems and Management


  • Analytical procedure
  • Continuous auditing


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