ch07 - Chapter 7: Computer-Assisted Audit Techniques...

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IT Auditing & Assurance, 2e, Hall & Chapter 7: Computer-Assisted Audit Techniques [CAATs] IT Auditing & Assurance, 2e, Hall & Singleton
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INTRODUCTION TO INPUT CONTROLS Designed to ensure that the transactions that bring data into the system are valid, accurate, and complete Data input procedures can be either: Source document-triggered (batch) Direct input (real-time) Source document input requires human involvement and is prone to clerical errors. Direct input employs real-time editing techniques to identify and correct errors immediately
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CLASSES OF INPUT CONTROLS 1) Source document controls 1) Data coding controls 1) Batch controls 1) Validation controls 1) Input error correction 1) Generalized data input systems
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#1-SOURCE DOCUMENT CONTROLS Controls in systems using physical source documents Source document fraud To control for exposure, control procedures are needed over source documents to account for each one Use pre-numbered source documents Use source documents in sequence Periodically audit source documents
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#2-DATA CODING CONTROLS Checks on data integrity during processing Transcription errors Addition errors, extra digits Truncation errors, digit removed Substitution errors, digit replaced Transposition errors Single transposition: adjacent digits transposed (reversed) Multiple transposition: non-adjacent digits are transposed Control = Check digits Added to code when created (suffix, prefix, embedded) Sum of digits (ones): transcription errors only Modulus 11: different weights per column: transposition and transcription errors Introduces storage and processing inefficiencies
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#3-BATCH CONTROLS Method for handling high volumes of transaction data – esp. paper-fed IS Controls of batch continues thru all phases of system and all processes (i.e., not JUST an input control) 1) All records in the batch are processed together 2) No records are processed more than once 3) An audit trail is maintained from input to output Requires grouping of similar input transactions
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#3-BATCH CONTROLS Requires controlling batch throughout Batch transmittal sheet (batch control record) – Figure 7-1, p. 302 Unique batch number (serial #) A batch date A transaction code Number of records in the batch Total dollar value of financial field Sum of unique non-financial field Hash total E.g., customer number Batch control log – Figure 7-3, p 303 Hash totals
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#4-VALIDATION CONTROLS Intended to detect errors in data before processing Most effective if performed close to the source of the transaction Some require referencing a master file
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ch07 - Chapter 7: Computer-Assisted Audit Techniques...

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