Financial reporting processes in modern business environments are increasingly driven by IT systems. IT Governance (ITG) aims to enforce control on such systems as they relate to overall financial reporting compliance requirements and guidelines. Traditionally, there has been a clear ‘chain of command’ with regards to ITG auditing: IT Governance guidelines and procedures drive Boards of Directors to establish compliance structures, who in turn put pressure on auditors to assess risks and reports on them. Successful operation of this chain is based on monolithic corporate structures which help auditors execute their tasks in a centralized, concentrated manner.
However, corporations are exploring ways of moving away from vertical integration, especially now that technological innovations remove operational barriers. This paper discusses about the link between emerging technology-driven corporate structures and auditing. After explaining basic terms and definitions of Corporate and IT Governance, the current landscape of ITG auditing is briefly described, in terms of designing and evaluating internal control procedures. This paper also focuses on business webs (b-webs), a distributed corporate structure based on Internet technologies, and its details and presented through B-web Transformation Model. Finally, the effects on IT Governance and the auditors’ role and tasks caused by the adoption of b-webs by corporations is analyzed and discussed. This discussion is driven by a new auditing framework that aims to track changes to auditing parameters and requirements as an organization evolves within the B-web Transformation Model.