Dynamic risk fluctuations, their global interconnective impact as well as shorter product lifecycles in an environment with significant influences on the corporate business model call for the implementation of an audit function that is up-to-date and operates in a foresighted manner.
In order to keep pace with these developments – from an auditing standpoint – it is necessary to switch from an audit-planning schedule that employs a static, annual perspective formulated one year in advance to a more timely rolling method.
At the same time, the rolling-audit planning method typically is supported on the one hand by quantitative data. On the other hand, assistance is provided by qualitative data in the form of a continuous audit-relationship-management approach. In this case, the methodology developed by ARC provides substantial support for thorough interconnectivity of the various audit-planning stages. These include the audit universe or audit landscape, multiple-year and one-year planning as well as the implementation of risk categorization within the operative audit planning and its actual performance.
The so called 8th EU Directive: DIRECTIVE 2006/43/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on statutory audits of annual accounts and consolidated accounts, (amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC) as well as local laws, e.g. the German Accounting Law Modernization Act (Bilanzrechtsmodernisierungsgesetz = BilMoG) as well as the country’s Corporate Sector Supervision and Transparency Act (Gesetz zur Kontrolle und Transparenz im Unternehmensbereich = KonTraG) places demands on companies – and consequently on their risk-oriented administrative departments as well. Among these requirements are a timely risk assessment regarding the internal monitoring system as a component of the internal-control, risk-management and governance system. ARC assists its clients in achieving this goal in sync with a statement made by Robert B. Hirth Jr., Chairman at Committee of Sponsoring Organizations of the Treadway Commission (COSO): “We work in a real-time world,