Auditing of CBIS

Chapter Ten

IIA Vs. AICPA

• IIA Audit Scope– Reliability and integrity– Complies with operating parameters– Review IC to safeguard assets– Review uses of firm’s resources– Review overall compliance with company

objectives

Internal Audits

• Financial– reliability and integrity of accounting records

• IS– general and applications controls of IS

• Operational– economic and efficient use of resources

Audit Risk

• Inherent Risk– material misstatements without controls– perhaps specific technology or industry risk

• Control Risk– material misstatements given the existing

control structure

• Detection Risk– probability that auditors will not detect errors

Materiality

• Define?

• Reasonable assurance

IS Audits• Security

• Program development and acquisition

• Program modification

• Computer processing– the test data phase

• Source data integrity

• Safeguarding of data files

Concurrent Audit Techniques• Integrated Test Facility (ITF)

– can the system recognize fictitious records

• Snapshot Technique– MF - TF - MF and auditor reviews

• System Control Audit Review File (SCARF)– Continuous and Intermittent Simulation (CIS)– set audit parameters and collect data in a file

• Audit Hooks– real-time notification of specific events

Key to Audit Software

• Integrate audit software and processes during design and implementation

Become Wealthy;Donate Audit Software to ISU

• Self-designed - comparison of reported and expected results; e.g., bonuses, commissions, wages, interest

• GAS, ITF, SCARF

• Automated flowcharting

• Automated decision tables

• Scanning routines (SSN example)