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Lecture 5 - Computer-Assisted Audit Tools and Techniques

This document discusses computer-assisted audit tools and techniques used to perform tests of application and data extraction during an audit. It describes various types of application controls including input controls, processing controls, and output controls. Input controls ensure valid, accurate, and complete transaction data and include source document controls, data coding controls, batch controls, validation controls, input error correction, and generalized data input systems. Processing controls monitor transaction processing between programmed procedures using run-to-run controls, operator intervention controls, and audit trail controls. Output controls deal with securing and distributing batch system output through techniques like output spooling, print programs, bursting, waste disposal, data verification, secure report distribution, and end user validation.

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Viviene Madriaga
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148 views

Lecture 5 - Computer-Assisted Audit Tools and Techniques

This document discusses computer-assisted audit tools and techniques used to perform tests of application and data extraction during an audit. It describes various types of application controls including input controls, processing controls, and output controls. Input controls ensure valid, accurate, and complete transaction data and include source document controls, data coding controls, batch controls, validation controls, input error correction, and generalized data input systems. Processing controls monitor transaction processing between programmed procedures using run-to-run controls, operator intervention controls, and audit trail controls. Output controls deal with securing and distributing batch system output through techniques like output spooling, print programs, bursting, waste disposal, data verification, secure report distribution, and end user validation.

Uploaded by

Viviene Madriaga
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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COMPUTER-ASSISTED AUDIT TOOLS AND TECHNIQUES

They are used in performing tests of application and data


extraction during audit.

APPLICATION CONTROLS are programmed procedures designed to


deal with potential exposures that threaten specific application.
Categories
 Input controls are designed to ensure that the transactions are
valid, accurate and complete. Data input procedures can either be
source document-triggered (batch) or direct input (real time).
 Processing controls
 Output controls ensure that system output is not lost, misdirected,
or corrupted and that privacy is not violated.
Input controls
Classes of input controls
1. Source document controls – deter fraud
 Use pre-numbered source documents
 Use source documents in sequence
 Periodically audit source documents
2. Data coding controls checks on the integrity of data
codes used in processing.
Transposition error occurs when digits are reversed.
Transcription errors :
 Addition controls – extra digits are added
 Truncation controls – digit or character is removed
 Substitution controls – replacement of digit in a code

3. Batch controls are effective method of managing high


volume transactions data through a system. It should
reconcile output produced with the input originally entered
into the system.

Hash totals refer too asimple control technique that uses


nonfinancial data to keep track of records in a batch.
4. Validation controls are intended to detect errors in
transaction data before it is processed.
a. Field interrogation – programmed procedure that
examines the characteristics of the data in the field
a. Missing data check – examines for the presence of blank spaces
b. Numeric-alphabetic data check – determines the correct form of
the data
c. Zero-value checks – verify that certain fields are filled with zeros
d. Limit check – determines if the value in the field exceeds an
authorized
e. Validity check – compare actual values in a field against known
acceptable values
b. Record interrogation validate the entire record by
examining the interrelationship of its field values.
a. Reasonableness check
b. Sign checks
c. Sequence checks
c. File interrogation ensures the correct is being
processed by the system
a. Internal label check
b. Version check
c. Expiration date check
5. Input error correction
Error handling techniques : correct immediately,
create and error file and reject the batch.

6. Generalized data input system (GDIS) includes


centralized procedures to manage data input for all
of the organization’s transaction processing system.
COMPONENTS
a. Generalized validation module – performs standard validation
routines that are common to many different applications.
b. Validated data file – temporary holding file through which
validated transactions flow to their respective applications
c. Error file – stores error records, correct then submit to GDIS.
d. Error reports –reports are submitted to facilitate error
correction
e. Transaction log – permanent record of all validated
transactions.
Processing controls
Categories of processing controls
1. Run-to-Run controls – use batch figures to monitor
the batch as it moves from one programmed
procedure to anther
 Recalculate control totals
 Transaction codes
 Sequence checks
2. Operator intervention controls

3. Audit trail controls


Transaction logs – serves as a journal for every
successfully processed transactions
Output controls
Controlling batch systems output
Batch systems usually produce output in the form of hard copy,
which typically requires the involvement of intermediaries in its
production and distribution.
TECHNIQUES IN CONTROLLING THE OUTPUT PROCESS
1. Output spooling – applications direct their output to magnetic disks
rather than to the printer directly.
2. Print programs – designed to prevent production of unauthorized
copies of output and employees browsing sensitive data.
3. Bursting – printed reports will have to have their pages separated
and collated.
4. Waste – sensitive computer output will have to pass through
shredding before disposal
5. Data control – verifying the accuracy of output before distribution to
users.
6. Report distribution – may be done through placing reports in a
secured mailbox, delivered personally or by a special courier.
7. End user control – reexamination of output reports for any error that
may have evaded the data control clerk’s review.

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