Auditability by Design: Embedding Regulatory Transparency into Financial Data Architectures

Abstract

Regulatory pressures on financial institutions have increased in their demands as to transparency, traceability and reliability of long-term audits. Conventional data architecture uses the external audit logs and manual reconciliation which at any rate does not scale. In this paper, an auditability-by-design approach is proposed, in which audit controls are made to be part of financial data architectures. The study employs a quantitative assessment in comparing audit-external and audit-native systems in the basis of reconstruction period, completeness of lineages, availability of control evidence and system throughput. The findings indicate that the audit native architectures lead to high audit readiness, less audit gaps and also the performance is stable. These results justify auditability as one of the architectural properties.