1. Auditing Computerized Information Systems
Chapter 8
Auditing Computerized Information Systems

2. 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.

3. 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.

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

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

6. 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)

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

8. 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

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

10. 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

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

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