Chapter 8 Auditing Computerized Information Systems Computer Audit

Computer Audit Tools to Test Computer Processing Elements of a “systems” audit approach. •

Computer Audit Tools to Test Computer Processing (cont. ) • Data transmission controls in

Comprehensive Approach Auditors must always: • Independently test the correctness of processing • Independently

Approaches to Address Correctness of Processing Test data and integrated test facility Concurrent processing

Test Data: Auditing through the computer Test data approach • Are control procedures functioning?

Concurrent Processing Methodologies • Tagging and tracing approach (a. k. a. snapshot approach) •

Using the Computer to Help Test Accounting Records Generalized Audit Software (GAS) • Footing

Using the Computer to Help Test Accounting Records Custom Designed Audit Software • Alternative

Unique Audit Approaches for Electronic Commerce • Risk Analysis • The Process and Control

Use of Personal Computing in Conducting an Audit Traditional Uses • Word Processing •

Unique Problems: Auditing a Client’s Spreadsheet • Parallel simulation • Test data • Manual

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Chapter 8 Auditing Computerized Information Systems

Computer Audit Tools to Test Computer Processing Elements of a “systems” audit approach. • Only authorized computer applications are developed. • Programs are thoroughly tested. • Authorization needed for changes to programs. • Access restricted. • Controls over users and input. • Monitoring controls in place.

Computer Audit Tools to Test Computer Processing (cont. ) • Data transmission controls in place. • Data integrity is periodically tested. • A comprehensive security and backup plan is in place.

Comprehensive Approach Auditors must always: • Independently test the correctness of processing • Independently test the reliability of data

Approaches to Address Correctness of Processing Test data and integrated test facility Concurrent processing Embedded audit modules

Test Data: Auditing through the computer Test data approach • Are control procedures functioning? • Is the computer application processing transactions correctly? • Are all transaction and master files fully and correctly updated? • Limitations! • Integrated test facility (ITF)

Concurrent Processing Methodologies • Tagging and tracing approach (a. k. a. snapshot approach) • The systems control audit review file (SCARF) approach • Embedded audit modules • Advantages

Using the Computer to Help Test Accounting Records Generalized Audit Software (GAS) • Footing • Selecting a sample • Extracting, sorting, summarizing data • Statistics • Analytical review • Screening • Checking • Calculations • Reports

Using the Computer to Help Test Accounting Records Custom Designed Audit Software • Alternative to GAS • Custom designed for specific client and specific application

Unique Audit Approaches for Electronic Commerce • Risk Analysis • The Process and Control Audit • Detailed testing of account balances • Tagging and Tracing • Embedded Audit Module • Audit Software

Use of Personal Computing in Conducting an Audit Traditional Uses • Word Processing • Spreadsheets Expanded uses • Electronic working papers • Groupware • Intelligent agents • Expert systems

Unique Problems: Auditing a Client’s Spreadsheet • Parallel simulation • Test data • Manual audit