Designing an Automated Audit Tool for the Targeted Risk Exposure Reduction

The risk exposure of an organization is the cost of being noncompliant for all process instances that are subject to auditing and it can be reduced by auditing internal controls for every process instance, detecting and eliminating the cause of non-compliance. This paper discusses the design consideration for an automated auditing tool to achieve the desired level of risk exposure reduction. A method is provided to measure the effectiveness and the limits of such tools and adjust their performance for various risk exposure levels.