Suggest ways to guard against the demerits of continuous audit.

The effect of disadvantages listed above may be minimized by adopting certain safeguards as follows:

The auditor can guard himself against tempering of figures in following ways:

• He should instruct the staff of the client to make alterations, if any, in figures that have been audited by only passing rectification entries in journal and bringing it to the notice of auditor.
• The auditor should also device special form of ticks for being placed against figures which have been altered and neither their purpose nor significance should be disclosed to client’s staff.
• Totals of accounts at the end of the period under review should, if practicable, be recorded in the audit note book and verified at the next visit.

To prevent collusion between the staff of the auditor and that of client, the auditor may rotate the duties of his staff in such a manner that every audit clerk is allowed to check a particular account only for a short period.

In order to ensure that the link ID audit work is not lost:

• The auditor should prepare detailed audit program.
• He should note down the queries, whose explanations, are unsatisfactory, in his audit note book and try to sort them out at subsequent visit.
• If possible, the auditor should try to check the accounts of similar nature in one continuous sitting.
• The auditor should not try to make change in the duties of his assistants as far as possible. This reduces the chances of inconvenience and disturbance in the work.

The dislocation in clients work may be reduced if the auditor plans his visits in consultation with the client. But planned visits need to be supplemented by surprise checks.

The biggest limitation of continuous audit is that it is quite expensive. Only big organizations should go for it after undertaking cost benefit analysis.