What question did this study set out to answer?

The aim is to enhance internal audit practices by introducing a predictive process for assessing late-payment risks.

January 24, 2026

Three Lines, One Clock: Deadline-Driven Predictive Auditing to Mitigate Late-Payment Risk

Key Points

The aim is to enhance internal audit practices by introducing a predictive process for assessing late-payment risks.
Utilized the 2018 BPI Challenge event log and synthetic corporate invoice log.
Transformed event traces into deadline-centered, time-bucketed prefixes.
Compared five classifiers to evaluate their effectiveness.
Developed a four-phase decision framework aligning interventions with organizational context.
Demonstrated a practical application for predictive monitoring in auditing.
Provided statistical evidence of the accuracy-timeliness tradeoff for audit scenarios.
Presented a governance-anchored decision framework for auditing interventions.

Abstract

ABSTRACT Internal audit is increasingly expected to move from a retrospective “after the fact” stance to a proactive, risk-mitigating role. We introduce a predictive process-monitoring approach that lets internal auditors forecast late-payment risk while preserving the role separation mandated by the Three Lines Model. Using the 2018 BPI Challenge event log and a synthetic corporate invoice log, we (1) transform traces into deadline-centered, time-bucketed prefixes; (2) compare five classifiers; and (3) embed the resulting accuracy-timeliness profiles in a four-phase decision framework that aligns intervention timing with organizational context and governance guard rails. The study contributes by showing (1) a concrete use case for predictive monitoring, (2) statistical evidence clarifying the accuracy-timeliness tradeoff for audit use cases, and (3) a reusable, governance-anchored decision framework. Data Availability: Supplemental material and source code data are available at in PredictiveMonitoringForAudit-main.zip. JEL Classifications: C53; C88; M42; O33.

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Three Lines, One Clock: Deadline-Driven Predictive Auditing to Mitigate Late-Payment Risk

Key Points

Abstract

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