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Control Automation to Reduce Costs of Control

Author

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  • Rob Christiaanse

    (EFCO Solutions, Amsterdam, Netherlands & Delft University of Technology, Delft, Netherlands)

  • Joris Hulstijn

    (Delft University of Technology, Delft, Netherlands)

Abstract

Much compliance effort concerns adherence to contracts. Parties to a contract need to make sure that the other parties will deliver. To this end they may require additional controls in the business process to monitor delivery and induce contractual penalties when needed. Controls have costs. In this paper the authors argue that introducing fully automated controls will help to reduce control costs, because (i) they can prevent misstatements (compliance by design) or (ii) they increase the quality of evidence and thereby reduce the audit risk for the external auditor and corresponding audit fees. The line of reasoning is illustrated by a case study of the implementation process of automated controls on the procurement process for public transport services for the elderly and disabled. This is a complex and heavily regulated domain. The case study indicates that control automation makes monitoring compliance to contracts in such complex domains feasible and that using control automation can in fact reduce the costs of control.

Suggested Citation

  • Rob Christiaanse & Joris Hulstijn, 2013. "Control Automation to Reduce Costs of Control," International Journal of Information System Modeling and Design (IJISMD), IGI Global, vol. 4(4), pages 27-47, October.
    • Handle: RePEc:igg:jismd0:v:4:y:2013:i:4:p:27-47
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    File URL: http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/ijismd.2013100102
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    Cited by:

    1. Wang, Yuxin & Tian, Yifu & Teixeira, André & Hulstijn, Joris & Tan, Yao-Hua, 2016. "Fault detection and diagnosis for compliance monitoring in international supply chains," Other publications TiSEM 3a2a4fd2-b5be-4f65-ab7b-d, Tilburg University, School of Economics and Management.

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