It will assist in determining the existence of

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Unformatted text preview: ence: _______________________________ _ IT Audit Manual Volume III 59 IT Audit Manual Audit Programme 3 :Computerised Inventory / Material Management Systems Audit A scrutiny of the major IT Applications being used by various auditee organizations falling under the different wings (Commercial, Defence, Railways, P&T, Civil Audit) indicates that one of the most commonly used IT Application is in Inventory Management. The present checklist on Computerised Inventory Systems is intended to help in conducting the Information Technology Audit of specific applications being used by various auditee organizations for managing the inventories. It will assist in determining the existence of internal controls and also the reliance that can be placed on the Inventory Management system being audited. It is stated that not all aspects as highlighted in the check list may be applicable for a particular IT Application depending on the environment in auditee organization and objectives of the system. The auditor should obtain sufficient and appropriate audit evidence through the performance of compliance and substantive procedures to draw reasonable audit conclusions thereon and to base audit opinion on the financial information. Experience shows that use of CAATs may be very helpful in gathering the audit evidence in support of the audit observations. IT Audit Manual Volume III 60 IT Audit Manual Checklist for Auditing Computerised Inventory Systems No A. Item KD Reference Inventory System Requirements (Needs determination function) 1. 2. 3. Does the system record customer/consuming agency demand and replenishment lead-time data for a period, analyze the data for anomalies, and compute demand and lead time forecasts on a regular basis? Computer-generated forecasts generally should be changed only when information is available to the manager that is not available to the automated system Does the system compute and routinely update the ordering costs, which may vary depending on the methods of procurement and other factors? The ordering costs should include costs of: o Reviewing the stock position; o Prepar...
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