Chapter 8 Auditing
Total that indicates the number of documents or transaction processed, compared with counts before processing.
Record counts
Consists of review and analysis of outputs that have been generated in the form of exception reports
manual follow up activities
Controls that apply to specific computer accounting tasks. ex: updating AR. Includes programmed controls and manual follow up activities.
Application control activities
Involves the development of a set of simulated transactions prepared by the clients programmers or the independent auditors. Used for appraising control activities to determine their effectiveness
Computer assisted audit techniques (CAAT)
Client develops a subsystem of dummy records and files for testing purposes only. Provides for continuous testing of the system. Used for test of controls. Can be costly.
Integrated test facility
Computer grams compares the result of computer processing against a min or max amount. Purpose is to determine whether predetermined limits have been exceeded.
Limit test control
Transactions are processed immediatley and all accounting records are updated instantaneously.
Online real time systems
Auditor uses his program to process the clients live data and then compares results with clients results. Used for substantive testing.
Parallel simulation
Comparison of data against a master file or table for accuracy
Validity test
Computer operators should not have authority to:
change programs
Purpose of input controls is to ensure the:
completeness, accuracy, and validity of input
Auditor obtains a copy of clients program and then controls the program:
controlled programs
Exception report should be reviewed and follow up on by the:
data control group
User departments are responsible for the development and execution of computer applications. (department both generates and uses its own information)
end user computing
Problem with parallel simulation:
formatting clients data to auditors software
Controls that apply to all or many IT systems in a organization. Include controls over the development and changes of grams and system, computer operations and access to programs and data
general control activities
Sums of data that would ordinarily not be added, such as unit prices, invoice numbers
hash totals
Auditing through the computer is required when processing is primarily:
online and updating in real time
concerned with input controls and processing controls which are written into computer programs
programmed control activities
Test data is processed by the clients programs but under the auditors control
test data approach
design of controls
type 1 report
operating effectiveness report
type 2 report
