Week11 - Auditing in E-Commerce Environment

Auditing Information Technology
Presentation Outline
I.
II.
Concepts in Information Systems

Auditing
Auditing Technology for Information
Systems
I. Concepts in Information
Systems Auditing
A. The Phases to the Information Systems
Audit
B. Structure of the Financial Statement Audit
C. Auditing Around the Computer
D. Auditing With the Computer
E. Auditing Through the Computer
For banking, cant inspect documents, less audit

trail, audit the system that generate the financial
information.
Audit thru the computers
Test reliability of system, process correct data
Tools: flowcharts, narrative description
Proper planning & identify key control
A. Phases of the Information

Systems Audit
1. Initial review and
evaluation of the area to
be audited, and the audit
plan preparation
2. Detailed review and
evaluation of controls
3. Compliance testing
4. Analysis and reporting of
results
B. Structure of the Financial

Statement Audit
Transactions
Transactions
Accounting
Accounting
System
System
Interim Audit
Compliance Testing
Financial
Financial
Reports
Reports
Financial
Statement Audit
Substantive
Testing
B1. Compliance Testing

Auditors perform tests of controls to determine
that the control policies, practices, and
procedures established by management are
functioning as planned. This is known as
compliance testing.
B2. Substantive Testing

Substantive testing is the direct verification of
financial statement figures. Examples would
include reconciling a bank account and
confirming accounts receivable.
Audit Confirmation
To ABC Co. Customer:
Please confirm that the
balance of your account
on Dec. 31 is _____ .
C. Auditing Around the

Computer
The auditor ignores computer processing.
Instead, the auditor selects source documents that
have been input into the system and summarizes
them manually to see if they match the output of
computer processing.
Processing
D. Auditing With The Computer

The utilization of the computer by an auditor to
perform some audit work that would otherwise
have to be done manually.
E. Auditing Through the

Computer
The process of reviewing and evaluating the
internal controls in an electronic data
processing system.
Audit
II. Auditing Technology for

Information Systems
A. Review of Systems Documentation
B. Test Data
C. Integrated-Test-Facility (ITF) Approach
D. Parallel Simulation
E. Audit Software
A. Review of Systems
Documentation
The auditor reviews documentation such as
narrative descriptions, flowcharts, and program
listings. In desk checking the auditor processes
test or real data through the program logic.
B. Test Data
The auditor prepares input containing both valid
and invalid data. Prior to processing the test
data, the input is manually processed to
determine what the output should look like.
The auditor then compares the computerprocessed output with the manually processed
results.
Illustration of Test Data

Approach
Computer Operations
Auditors
PrepareTest
Test
Prepare
Transactions
Transactions
AndResults
Results
And
Transaction
Transaction
TestData
Data
Test
Computer
Computer
Application
Application
System
System
Computer
Computer
Output
Output
Auditor Compares
Manually
Manually
Processed
Processed
Results
Results
C. Integrated Test Facility (ITF)

Approach
A common form of an ITF is as follows:
1. A dummy ITF center is created for the auditors.
2. Auditors create transactions for controls they
want to test.
3. Working papers are created to show expected
results from manually processed information.
4. Auditor transactions are run with actual
transactions.
5. Auditors compare ITF results to working papers.
Illustration of ITF Approach

Computer Operations
Actual
Actual
Transactions
Transactions
PrepareITF
ITF
Prepare
Transactions
Transactions
AndResults
Results
And
ITF
ITF
Transactions
Transactions
Computer
Computer
Application
Application
System
System
Reports
Reports
WithOnly
Only
With
ActualData
Data
Actual
Auditors
DataFiles
Files
Data
ITF Data
Reports
Reports
WithOnly
Only
With
ITFData
Data
ITF
Auditor
Compares
Manually
Manually
Processed
Processed
Results
Results
D. Parallel Simulation
The test data and ITF methods both process test
data through real programs. With parallel
simulation, the auditor processes real client data
on an audit program similar to some aspect of the
clients program. The auditor compares the
results of this processing with the results of the
processing done by the clients program.
Illustration of Parallel Simulation

Computer Operations
Auditors
Actual
Actual
Transactions
Transactions
Computer
Computer
Application
Application
System
System
ActualClient
Client
Actual
Report
Report
Auditors
Auditors
Simulation
Simulation
Program
Program
Auditor Compares
Auditor
Auditor
Simulation
Simulation
Report
Report
E. Audit Software
Computer programs that permit computers to be
used as auditing tools include:
1. Generalized audit software
Perform tasks such as selecting sample data
from file, checking computations, and
searching files for unusual items.
2. P.C. Software
Allows auditors to analyze data from
notebook computers in the field.
Summary
Compliance and Substantive Testing
Auditing Around the Computer
Auditing with the Computer
Auditing Through the Computer
Testing Approaches Through the Computer

Week11 - Auditing in E-Commerce Environment

Uploaded by

Copyright:

Available Formats

Week11 - Auditing in E-Commerce Environment

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Week11 - Auditing in E-Commerce Environment

Uploaded by

Copyright:

Available Formats

Auditing Information Technology

Concepts in Information Systems

For banking, cant inspect documents, less audit

A. Phases of the Information

B. Structure of the Financial

B1. Compliance Testing

B2. Substantive Testing

C. Auditing Around the

D. Auditing With The Computer

E. Auditing Through the

II. Auditing Technology for

Illustration of Test Data

C. Integrated Test Facility (ITF)

Illustration of ITF Approach

Illustration of Parallel Simulation

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.