Continuous loop averaging deconvolution (CLAD) is a recently developed method to restore t he auditory evoked potential (AEP) under high stimulus rate condition. This meth od solves the deconvolution problem in frequency domain for computational effici ency, but suffers from stringent limitation in selecting a stimulus sequence wit h required spectral property. Hereby we propose a new method to solve the decon volution problem in time domain by constructing a linear transform matrix to mod el the convolution process. To understand the AEP distortion caused by the ill posed matrix generated from a bed stimulus sequence, we assess the matrix prope rty using singular value decomposition (SVD) technique and introduce Tikhonov r egularization method to deal with the ill posedness. In the stimulation experim e nt, we compare some typical sequences with different ill posedness conditions a nd restore the transient AEPs under various noise levels. These results justify the proposed approach to the AEP deconvolution with less restriction on the s equence selection.