WHAT DO AUDIT DIRECTORS SAY? QUALITATIVE VALIDATION OF THE CAS CONTROL ADJUSTMENT → DETECTION PATHWAY
Keywords:
Continuous auditing; internal control integrity; qualitative research; audit directors; fraud detection; dynamic governance; emerging economy; Nigeria.Abstract
Purpose: Quantitative studies have established that Continuous Auditing Systems (CAS) are positively associated with Fraud Detection Effectiveness (FDE), and that Internal Control Integrity (ICI) mediates this relationship. However, the underlying mechanisms remain a “black box.” This study provides qualitative validation of the mediation pathway, exploring how real‑time monitoring translates into improved detection outcomes through control adjustments. Design/methodology/approach: Semi‑structured interviews were conducted with 15 audit directors (10 internal audit heads, 5 external audit partners) across banking, manufacturing, public sector, and professional services in Nigeria. Participants were purposively sampled from the Wave 2 respondents of a larger mixed‑methods study (Article 2). Transcripts were analysed using template analysis, with inter‑coder reliability (κ = 0.84). Data saturation was achieved after 12 interviews. Findings: Four themes emerged: (1) CAS alerts are interpreted primarily as indicators of control weaknesses rather than direct evidence of fraud; (2) alerts trigger formal (e.g., monthly control exception reviews) and informal (e.g., immediate access revocation) control adjustments; (3) adaptive controls reduce false positives and enhance genuine fraud detection; (4) without strong ICI, CAS alerts are ignored, rendering the system ineffective. These findings empirically validate the CAS → ICI → FDE mediation pathway. Practical implications: Organisations must reframe CAS as a diagnostic instrument for control improvement, not merely a detection tool. Establishing formal feedback loops (alerts → review → adjustment) is critical. CAS investments yield maximum returns only when the control environment is strong enough to act on alerts. Originality/value: This study provides rare qualitative evidence from an emerging economy that unpacks the “black box” of the mediation pathway. It moves beyond statistical association to explain the process of adaptive fraud risk intelligence, offering rich, contextual insights for both theory and practice.
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