Audit in a Computer Based Environment

Author:Peter BYRNE, ACCA

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Keywords:audit, accounting systems, auditing standards, computer assisted audit techniques

Abstract:
The accounting systems of many companies, large and small, are computer-based; questions in all ACCA audit papers reflect this situation.\r\nThe aim of this article is to help auditors improve their understanding of this topic by giving practical illustrations of computer-based controls and computer-assisted techniques and the way they may feature in the questions issued during the audit work.\r\nReferences will be made throughout this article to the most recent guidance in standards:\r\n-\tISA 300 (Redrafted) Planning an Audit of Financial Statements\r\n-\tISA 315 (Redrafted) Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment\r\n-\tISA 330 (Redrafted) The Auditor’s Responses to Assessed Risks.\r\nThe attraction of embedded audit facilities is obvious, as it equates to having a perpetual audit of transactions. However, the set-up is costly and may require the auditor to have an input at the system development stage. Embedded audit facilities are often used in real time and database environments. The key objectives of an audit do not change in a computer environment. The auditor still needs to obtain an understanding of the system in order to assess control risk and plan audit work to minimize detection risk.\r\n

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