A theory of complex adaptive inquiring organizations: Application to continuous assurance of corporate financial information

DOI

10.1017/S0269888913000428

Document Type

Journal Article

Publication Date

5-19-2014

Publication Title

Knowledge Engineering Review

Volume

30

Issue

3

First Page

265

Last Page

296

ISSN

2698889

Abstract

Drawing upon the theories of complexity and complex adaptive systems and the Singerian inquiring system from C. West Churchman's seminal work The Design of Inquiring Systems, the study herein develops a systems design theory for continuous auditing systems. The discussion focuses on the two foundational theories, development of the theory of Complex Adaptive Inquiring Organizations (CAIO) and associated design principles for a continuous auditing system supporting a CAIO, and instantiation of the CAIO theory. The instantiation consists of an agent-based model depicting the marketplace for Frontier Airlines that generates an anticipated market share used as an integral component in a mock auditor going concern opinion for the airline. As a whole, the study addresses the lack of an underlying system design theory and comprehensive view needed to build upon and advance the continuous assurance movement and addresses the question of how continuous auditing systems should be designed to produce knowledge - knowledge that benefits auditors, clients, and society as a whole.

Open Access

Green Final

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