Yale University's on-line examination of accounting and administrative systems is discussed. Program goals are to review financial management systems at the university to identify weaknesses in internal controls, and to fulfill all audit requirements of federal grants and contracts. After outlining the quarterly audit cycle, advantages of the following features of the Yale approach are identified: current transactions are audited; auditing is performed by the university audit staff; the effort is directed by an oversight committee made up of representatives of the university, the federal government, and the university's public accounting firm; external auditors supplement the examination with work they perform during their annual financial statement audit; the university develops its own specially tailored audit programs to focus greater attention on the areas of potential risk; and an indepth review of each system that controls sponsored projects is conducted. Administrative and financial controls are identified, along with indirect costs. Benefits in the first year on the on-line audit approach and the future of the project are discussed. It it noted that the experimental audit at the university has demonstrated the importance of coordinating external, internal, and government auditing sources in total. Information on General Accounting Office standards for audit is included. (SW)