lecture_09 4240

lecture_09 4240 - ACCT 4240 Auditing Information Systems...

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ACCT 4240: Auditing Information Systems Auditing
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Manual Handling of a Purchase Order Adapted from Datamation , 1990, © 1990 by Cahners Publishing Co.
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How EDI Functions
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XBRL Operation XML XBRL Specification XBRL Taxonomies XBRL Instance Documents XBRL Reports/Style Sheet XBRL Assurance XBRL Tagged Data XBRL Controls XBRL Standards Board Source: Reproduced with permission from The Canadian Institute of Chartered Accountants. 2005. Information Technology Advisory Committee: Audit & Control Implications of XBRL (December). Available at: http://www.cica.ca/itac
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Elements of a Computer-Based Information System - Hardware The physical equipment: Central processing unit (CPU) Tape drives Disk drives Printers Terminals
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Operating systems Windows Linux Unix Applications software Payroll Inventory Accounts receivable Accounts payable Elements of a Computer-Based Information System - Software
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Elements of a Computer-Based Information System - Organization Director of Information Systems Operations Operators Data Entry Clerks Applications and Programming Systems Analysts Systems Programmers Applications Programmers Data Control Data Control Clerk Data and Program File Librarian
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Planning and Computers The client’s use of computers to process transactions does not change: The objectives of an audit Generally accepted auditing standards The nature of management assertions The auditors’ report What does change is the “how”, not the “why”
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Differences with Computer Processing Audit trails are different than with manual accounting systems Portions of audit trails may be temporary or never exist Processing is more uniform Computer may initiate and complete transactions Greater potential for fraud
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Impact of Computers on Planning Extent to which computers are used Complexity of computer operations Organizational structure of computer operations Availability of data Use of CAATs Need for specialized skills by auditor
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Audit Alternatives Continuous (Electronic) Auditing Auditing Around the Computer Auditing Through the Computer Non-concurrent (after-the-fact) auditing Can be used for tests of transactions and balances (substantive tests) Can be used to test the effectiveness of controls at various times in the past Recent SAS pronouncements reduce applicability of non-concurrent auditing
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Audit Alternatives Concurrent auditing provides greater information about the effectiveness of controls Special audit test records can be used to examine system effectiveness Embedded audit modules collect, process and report audit evidence as it is processed by the system
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SAS No. 80 In entities where significant information is transmitted, processed, maintained, or accessed electronically, the auditor may determine that it is not practical or possible to reduce detection risk to an acceptable level by performing only substantive tests for one or more financial statement assertions.
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SAS No. 80
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This note was uploaded on 03/08/2012 for the course ACCT 4240 taught by Professor Staff during the Spring '08 term at U. Memphis.

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lecture_09 4240 - ACCT 4240 Auditing Information Systems...

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