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2015 Volume 30
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RESEARCH ARTICLE   Open Access    

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

  • 1.

    Crummer Graduate School of Business

  • 2.

    School of Accounting and Information Systems

  • 3.

    Palumbo Donahue School of Business

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  • 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.
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  • Cite this article

    John R. Kuhn, James F. Courtney, Bonnie Morris. 2015. A theory of complex adaptive inquiring organizations: application to continuous assurance of corporate financial information. The Knowledge Engineering Review 30(3)265−296, doi: 10.1017/S0269888913000428
    John R. Kuhn, James F. Courtney, Bonnie Morris. 2015. A theory of complex adaptive inquiring organizations: application to continuous assurance of corporate financial information. The Knowledge Engineering Review 30(3)265−296, doi: 10.1017/S0269888913000428
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RESEARCH ARTICLE   Open Access    

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

  • 1.

    Crummer Graduate School of Business

  • 2.

    School of Accounting and Information Systems

  • 3.

    Palumbo Donahue School of Business

  • Published online: 19 May 2014
The Knowledge Engineering Review  30,  2015, 30(3): 265−296  |  Cite this article

Abstract: 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.

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    • Although SOX is a US statute, it applies to all companies, domestic or international, traded on US stock exchanges.

    • In this paper, we refer to US auditing standards and use a US company as our case study. However, assessment of whether a client remains a ‘going concern’ is not just a requirement for US auditors. In most countries, auditors are required to assess whether a client is a going concern and make appropriate disclosures when the future viability of the client is in question.

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    Cite this article
    John R. Kuhn, James F. Courtney, Bonnie Morris. 2015. A theory of complex adaptive inquiring organizations: application to continuous assurance of corporate financial information. The Knowledge Engineering Review 30(3)265−296, doi: 10.1017/S0269888913000428
    John R. Kuhn, James F. Courtney, Bonnie Morris. 2015. A theory of complex adaptive inquiring organizations: application to continuous assurance of corporate financial information. The Knowledge Engineering Review 30(3)265−296, doi: 10.1017/S0269888913000428
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