Continuous audit implications of Internet technology: triggering agents over the Web in the domain of debt covenant compliance

The Canadian Institute of Chartered Accountants and the American Institute of Certified Public Accountants have together called on the research community to show how continuous audit (CA) could be implemented in various auditing domains. In response to this call, we look at the domain of debt covenant compliance, and we utilize Cold Fusion, a leading Web applications development technology, to design and demonstrate an implementation of a continuous process audit within this domain. We design and demonstrate a system that uses agents sent over the Internet to continuously monitor whether actual values of client's variables are in compliance with standards for these variables set out in the debt covenant agreement-all from a remote location, the loan officer's desk.