After studying this chapter you will be able to understand: Issues introduced in a IT environment, impact of automated transaction processing on the evaluation of I/C, types of computer controls, categories of general controls, program development controls, program change controls, processing controls,. | Auditing & Assurance Services, 6e Module H Auditing and Information Technology "To err is human, but to really foul things up you need a computer.“ --Paul Ehrlich, American biologist, author, and technology commentator “A common mistake people make with trying to design something completely foolproof is to underestimate the ingenuity of complete fools.” --Douglas Adams , author of The Hitchhiker’s Guide to the Galaxy Mod H-2 2 Issues Introduced in a IT environment Input errors Systematic vs. random processing errors Lack of an audit trail Inappropriate access to computer files and programs Reduced human involvement in processing transactions Mod H-3 Impact of Automated Transaction Processing on the Evaluation of I/C Phase Effect(s) Understanding Understand and document controls related to automated processing of transactions Assessment Consider controls related to automated processing of transactions in preliminary assessment of control risk Testing Identify , test, and evaluate degree of compliance of controls related to automated processing of transactions Mod H-4 Types of Computer Controls General Controls Relate to all applications of an accounting information system (pervasive) Deficiencies will affect processing of various types of transactions Automated Application Controls Relate to specific business activities Directly address management assertions Mod H-5 5 Categories of General Controls Program development controls Program change controls Computer operations controls Access to programs and data controls Mod H-6 Program Development Controls Acquisition and development of new programs is properly authorized and conducted with organization policies Appropriate users participate in process Programs and software are tested and validated prior to use Programs and software have appropriate documentation Mod H-7 Systems Development Life Cycle Identify Requirements Feasibility Analysis Determine System Specifications Develop Programs Design Procedures System . | Auditing & Assurance Services, 6e Module H Auditing and Information Technology "To err is human, but to really foul things up you need a computer.“ --Paul Ehrlich, American biologist, author, and technology commentator “A common mistake people make with trying to design something completely foolproof is to underestimate the ingenuity of complete fools.” --Douglas Adams , author of The Hitchhiker’s Guide to the Galaxy Mod H-2 2 Issues Introduced in a IT environment Input errors Systematic vs. random processing errors Lack of an audit trail Inappropriate access to computer files and programs Reduced human involvement in processing transactions Mod H-3 Impact of Automated Transaction Processing on the Evaluation of I/C Phase Effect(s) Understanding Understand and document controls related to automated processing of transactions Assessment Consider controls related to automated processing of transactions in preliminary assessment of control risk Testing Identify , test, and evaluate .
