Continuous audit
In one sentenceAn audit carried out at short intervals throughout the year instead of being postponed entirely until after the accounts are closed at year end.
Simply put
In a continuous audit the auditor visits the business or examines its data every month or every quarter, so errors are found close to when they happen and fixed before they pile up.
It suits businesses with many transactions, but it costs more, and the auditor must make sure that what was examined has not been changed afterwards.
Example
A pharmacy chain with dozens of branches agrees with its auditor to examine sales and inventory every three months, so by year end most findings have been dealt with and the final audit takes less time.
Don't confuse it with
Complete auditA complete audit means examining all transactions, not some of them, while a continuous audit means spreading the examination across the year.