Chapter 17 - Advanced topics in assurance services. After studying this chapter you should be able to: appreciate the framework of standards under which assurance services are currently offered, and how specific standards relate to different types of assurance services; understand the assurance provider’s obligations in relation to audits of financial information other than general-purpose reports, including special-purpose reports, components of financial reports and summarised financial reports;. | CHAPTER 17 ADVANCED TOPICS IN ASSURANCE SERVICES AUDITING IN AN E-COMMERCE ENVIRONMENT E-commerce defined: The use of electronic transmission mediums (telecommunications) to engage in the exchange, including buying and selling, of products and services requiring transportation, either physically or digitally, from location to location. E-commerce is changing how organisations currently undertake business. EARLY E-COMMERCE SYSTEMS: ELECTRONIC DATA INTERCHANGE (EDI) When parts are shipped, supplier transmits an invoice to manufacturer Reduces data entry, mailing costs and time to complete transactions Forerunner to e-commerce was EDI. Example: Manufacturer requires suppliers to accept orders through electronically transmitted purchase orders: CURRENT CATEGORIES OF E-COMMERCE SYSTEMS Business-to-business (B2B) e-commerce: Companies buying from and selling to each other online. EDI was the early form for undertaking B2B e-commerce. Business-to-consumer (B2C) e-commerce: Any business or organisation that sells its products or services to consumers over the Internet, . . BUSINESS RISK ASSESSMENTS AND CONTROL CONSIDERATIONS Number of differences for business risk assessment and controls for B2B compared with B2C e-commerce B2B: audit client is transacting with small group of other businesses (identity known, authorisation procedures in place) B2C audit client is transacting with world at large (identity unknown) RISK CONSIDERATIONS E-commerce risks include: Risks arising from the nature of relationships with e-commerce trading partners Risks related to the recording and processing of e-commerce transactions Pervasive e-commerce security risks, including privacy issues Fraud risks Risks of systems failures or ‘crashes’ E-COMMERCE CONTROLS Include: Security infrastructure controls (firewalls, encryption and other security controls) Systems controls (controls over systems development, systems monitoring) Programmed controls (. to . | CHAPTER 17 ADVANCED TOPICS IN ASSURANCE SERVICES AUDITING IN AN E-COMMERCE ENVIRONMENT E-commerce defined: The use of electronic transmission mediums (telecommunications) to engage in the exchange, including buying and selling, of products and services requiring transportation, either physically or digitally, from location to location. E-commerce is changing how organisations currently undertake business. EARLY E-COMMERCE SYSTEMS: ELECTRONIC DATA INTERCHANGE (EDI) When parts are shipped, supplier transmits an invoice to manufacturer Reduces data entry, mailing costs and time to complete transactions Forerunner to e-commerce was EDI. Example: Manufacturer requires suppliers to accept orders through electronically transmitted purchase orders: CURRENT CATEGORIES OF E-COMMERCE SYSTEMS Business-to-business (B2B) e-commerce: Companies buying from and selling to each other online. EDI was the early form for undertaking B2B e-commerce. Business-to-consumer (B2C) e-commerce: Any .
