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IMPACT OF IT IN THE AUDIT PROCESS - Coggle Diagram
IMPACT OF IT IN THE AUDIT PROCESS
Control environment factor
assignment of authority and responsibility
clear lines of authority and responsibility to ensure objectives are met
human resources policy and practices
competent and trustworthy employees are key ingredients in internal control system
Control procedures
Information processing
IT can affect the authorization of transaction and keep adequate documents and records
auditor may not be able to observe the authorization policies
well-designed information system should include record transaction taking place in readable form
Segregation of duties
program within the system may assume the responsibilities of all the function
Physical procedures
most assets and records concentrated in the database system
need to have proper backup controls for computer programs and data files
Common Data Validation Control
sequence check
input date are proper in numerical or alphabetical sequence
existence (validity) test
test of an ID number of code
range test
value in field within an allowable range of value
Field test
ensure its contain either all numerical or alphabetic character
Limit test
ensure numerical value does not exceed some predetermined value
sign test
ensure that the data in a field have the proper arithmetic sign
check-digit verification
numerical value computed to provide assurance that the original value wad not altered
Purpose of obtain understanding of the entity internal control
identify types of potential misstatement
consider factor that affect risk of material misstatement
design test of controls and substantive procedures