Introduction

Electronic data processing is the function of planning, acquisition, management and reporting of transactions by the use of computers and related peripherals. On a PDE is first taken from the source documents such as invoices, receipts of income, payment receipts, checks, etc. Then, after the data inputs to the computer where it is entered from the keyboard or other input device data. The captured data is then processed by the accounting software in use, because there are different structures of the modules in application software and account number, processing the same data from one package to another are different. As I said, that the relationship is one of the functions of treatment, it is obvious, no doubt that the reports of several types of packages can be made vary from one system or another package. For example, some systems provide almost all basic financial reports such as

balance the state’s financial situation known as the balance, status of financial performance, commonly called the state revenue and expenditure or profit and loss statement, cash flow statement, statement of changes in shareholders’ equity

This type of packaging, almost all financial reports can be considered compatible with all types of financial requirements and treatment facilities is very expensive and in many companies and non-commercial.

Moving to other packages that not all the statements we see that they are specific and limited applications that go from one company to give not only some have the equilibrium, while the rest of the report be prepared by the auditors. Others give other than statements of cash flows. These problems require the need for the system analyst in an organization called. These professionals have a responsibility to consider the need of the organization on issues of electronic data processing. They do it with the words of a feasibility study to be facilitated through communication with senior financial executives of the organization.

Electronic data processing has its advantages and disadvantages of the business and professionals. Following are some advantages and disadvantages that can be observed in the daily life of our company.

Benefits

Quick and service time of a financial institution or banks in terms of manual data processing, are used only formally even harder to get your tax savings or the stock received banque.Records pensioners of the civil service were not easily accessible problems in the past and caused a lot of seniors who are in government for many years, which had served as in the modern electronic data processing of these services very quickly and made pensioners from the old souffrances.Performance in the production and related work by automated systems are improved, are that the inventory purchases and inventory control so there is no money in unnecessary idling pick ups.

Disadvantages

The electronic data processing reduces jobs for accountants, are represented as tasks that could have happened to run by five people. acquired, for example when entering a transaction in which purchases with cash or credit card were the stock will be automatically adjusted, total purchases and bank account will be adjusted when it is paid in cash will also be adjusted, the total amount of creditors are set when the purchase on credit, and finally, the financial statements as a balance sheet and statement of financial position and results when the purchase was in cash automatically adjusted. These are just some of the activities to be performed after a simple registration of the transaction in the system by a professional comptable.Traitement electronic data requires more know-how and a lot of money to be invested in IT that the organization is not possible to work correctement.Il providing electronic data processing and use without a computer, where it can no regular power supply

After reviewing the advantages and disadvantages of electronic data processing in the modern business world a little today about the challenges for organizations and systems. It is an undisputed fact that the electronic data processing is now popular with the majority of business associations won. However, some problems before and after the organization decided to focus away from manual to electronic data processing. The first thing to do by the organization to ensure that its own ICT policy, management, replacement and maintenance of computers and peripherals, addresses, and last but has larger and the access policy to focus on access codes and passwords . There is talk about a cure or answer to the challenge of security risks that I wanted. Yes, safety is a big or a huge opponent of the electronic data processing. As some people to malicious programs like viruses in the system of electronic data processing and destruction of important files can register known or even run programs, even disloyal others can access to remove records and or modify records about their interests and now a loss for society. There are many risks, but let me stop here.

For many years

audit carried out in open environments and as a result of the audit with accounting tools made to save as manual work, which leaves the listener used to his job. Control risk in the treatment manual and electronic processing are not the same, that the use of modern techniques of risk assessment and testing are necessary. to be related Apart from the use of computer-based technologies on the market, following the introduction of electronic data processing put in many organizations.

EDP AUDIT AND ENVIRONMENTAL

Sense of electronic data processing ( IT)

auditing computer information system environment or CIS electronic data processing exists when an organization uses one or more computer (s) of any kind and size for the preparation of financial statements. While there are changes in the overall objective and scope of the examination within the CIS or computer science are, the examiner should the impact of computers on (a) treatment, (b) storage (c) recovery, and (d) the disclosure of financial information.

Sub electronic data processing system, it is practically eliminate errors such as arithmetic errors, display errors, total, etc. However, any programming errors cause serious errors and false results.

basic functionality of the computing environment

Here are the basic features of the CIS or the environment:

(a) the infrastructure

hardware.

hardware consists of CPU (central processing unit), monitor, printer, mouse and keyboard, we can build on them differently, eg

I Personal Computer (PC) of a person and leads to process data a single machine: .. ii Local Area Network (LAN), where there is a connection between two or more computers in a specific place small (eg Desktop) to save the program and all associated files centrally iii remote PC, the location of the PCs in different locations or cities, but are interconnected. iv treatment. distributed computing, where a central computer, the main and the subsidiary processes in distributed processors instead. v. Electronic Data Interchange (EDI), making it there is a transfer of structured data without manual verification on individual computers, sparing them the need for the data itself “

Operating systems

This can process windows, Microsoft (MS) Office, the Disk Operating System (DOS) LUNUX, etc. You monitor the transmission of data between the processor of the computer and diskettes and managing files and programs onto discs.

Application Soft ware

This is a set of computer programs, such as TALLY, MYOB, Simply Accounting, etc. Quicken particularly accounting software development, including the operating system, compiler, packages, and user programs that allow a data center for special operations.

(b) The lack of track records and transactions

Guide to the accounts, there is a trail of transactions. First comes a document (vouchers, invoices, etc.) transaction. Then there is the entrance to the transaction in the account of the original books (newspapers, magazines, etc.) Then there was an agreement on the most important books (general ledger, etc.). Finally, the net effect of the transaction reflected in the financial statements .

EDP, on the other hand, there is often no transaction -. authoring, and no visible trace of the transaction, for example, if it can direct input of information into the computer so they do not all physical input documents, such as well, invoice, etc., and no trace of the transaction. For example, in an electronic system, seller directly power sales into the computer without evidence, or there may be some transactions through the system to program commands such as reminders to be generated based Customers

have failed to consider, therefore, as the electronic data processing can affect the process of audit review, it should consider the availability of data

(a) entry into the computer

( b stored) in the files and

(c) the creation of the output.

The data can be consulted in the machine -. a readable and only for a short period of time

In some cases, the examiner at the request of the customer to keep this data under consideration. The absence of visible inputs increases the risk of errors remain hidden, which is in direct contradiction with manual accounting records, where such errors are visible due to the presence the physical input documents.

(c) the amount of information processing in a few hands.

In the computer environment, but few people all the information. By the drawbacks, this is the manual system are based there division of labor among the same people several. Accordingly, controlled use of the separation of the various functions may be absent or ineffective. Other people to achieve the operation of the system of electronic data processing expertise with respect to data sources and methods of treatment, and the production and distribution of production. Sometimes you can work your sole control use of electronic data processing, the data or the program itself, to commit fraud is change.

likelihood of such fraud is higher in organizations with systems such as Electronic Data Interchange “where almost all data and programs are available at headquarters or a few sites.

(d) The possibility of error.

Although

electronic data processing reduces the risk of human errors, such as computational errors, programming errors can lead to improper treatment of all transactions. In addition, in the absence of continuous monitoring by observing the error in the manual system, errors in processing electronic data can be hidden for long. There is also the chance of mistakes when persons without authorization to access data, changes in the stored data.

(e ) increased management control and effective monitoring.

to review electronic data processing facilities management and monitoring to enable the activities of the company. C ‘because it has effectively a system of internal control electronic by several analysis tools which data processing generated.

The examiner may make even computerized verification tools to carry out the audit review more efficient. In fact, the electronic data processing software and hardware orders, a feature not included in the manual system.

SERVICES

computer systems AUDIT

(a) computer systems are more reliable.

/ p A

Computer> work as planned. If the process was to be considered taking into account all possible circumstances, the computer is more reliable and consistent than the manual system. In the manual system, the examiner, a detailed investigation of a series of transactions, errors, and behavior was still some may still unknown. Not so in the case of electronic data processing. It is sufficient to determine whether effective internal control over programs and, where appropriate, review of certain transactions are significant or guarantee unusual. accurate accounting

(b ) can computer system integrated control procedures

built -. is in automatic control methods, systems of electronic data processing, show some unusual or significant transactions such as late payments, stocks fell below prescribed levels, etc. In the manual system to double the adjuster their efforts in that direction. The requirement of “password” in the electronic data processing is the data secure from access by unauthorized persons. In the manual system, there is always the possibility of “unauthorized access to accounts.

(c) Automatic update of all relevant computer files in a single transaction.

power of a single transaction in the computer updates its records in all files. For example, the purchase of raw materials from a provider will update to the supplier’s accounts, purchasing and inventory. In the manual system, different people will need to update the relevant records in their care. Likewise, with suitable programming, computer systems can perform some tasks without human intervention. For example, production of monthly accounts for the credit customers no longer for manual preparation of financial statements in individual cases.

procedures required to review

IT / IEC ENVIRONMENTAL

processed in the handling of information on computers, the examiner may adopt a traditional approach of assuming that information processing under the manual system was not of computers. The only difference is that he realized the object of his review of the test is a computer printout, not change the books by hand. The result is that they do not sufficiently change its audit program and runs and runs as before. However, this approach has some inherent weaknesses. First, it is not possible to assess the internal control system on the computer, which can lead to more errors and fraud in the manual system. Second, the audience can spend too long on certain business activities such as monitoring and display of the transaction can not avoid, when an effective internal control exists. Thirdly, it ignores the benefits of the costs and risks which might be available to the auditor, it would take appropriate techniques, the test by computer.

(b) examination in the IT environment.

In this case, the, the examiner should the internal controls assessed in terms of data processing and other electronic controls, and thus make extensive use of computer (s) to determine the nature, timing and degree of compliance with the audit procedures or material. But what it needs to have sufficient knowledge of computer systems to plan, run, monitor and review the work of others. But he can acquire the necessary expertise or hire people suitable for the job.

how auditors discuss the audit

IT environment

(a) the reliability of financial reporting and assessment of .. Internal Control Systems

The Examiner notes how the accounting and internal control of the company should be reliable for this purpose, he must check the following:

(i) There are no restrictions on the access to electronic data processing

This restriction should be in terms of access to files on the device, programs and data. A computer room should be in the custody of an officer. He alone has to manage the program files and data. In addition, it has to be available only to authorized persons shall do so, and a recording of the broadcast program and data files. Another limitation is by giving the password (PIN) to authorized users computer. Yet another restriction can be given different rights for different users, for example, some can not read files, read and modify other data files, some as the program files.

The auditor should also see if there are suitable methods of control engineering. For example, almost all of the computers has been started to verify the proper functioning of the various components and peripherals. Otherwise, a message on the screen. If the computer system has parity check to be seen if, due to causes such as dirt or moisture, there is a disturbance in the data transfer between devices O. This error can result in loss or corruption of data, including computer system, be corrected by a new attempt for transmission. The computer system with a double check by reading the data, put it on a hard drive and writes media boxes, error shows in the process.

(ii) Are there plans for rapid detection and correction of errors

error may occur when entering data, treatment, or by a defect in the computer system . Here provide the auditors that the transactions are processed by the computer should have duly authorized their inclusion in the computer files correct, there is no more loss, duplication, or inappropriate change in them, and there are real and further erroneous transactions He should also see that there should be a proper use of master files, transaction and program files, the examiner checked the error -.. The correction procedure, because it shows the proper functioning of the internal control system

.

(iii) an agreement to acquire the system if it

is the case of electronic data processing broken systems due to power failure or mechanical failure, should be appropriate arrangements for the resumption of the system without that the entries or records.

(iv) is the electronic data processing – Output generates accurate and complete

correctness and completeness of production will depend on the accuracy and completeness of the data in the computer and its treatment application. Entry and adequate controls. Recalculation of the numbers and compare the output with hand-written notes are other methods for this purpose. The auditor should see that it provide restrictions on access to treatment of these data, that production produces accurate and complete, and that only authorized persons to receive on time.

(v) Are there plans adequate security for stored data

due to wrong treatment or by natural or artificial, it may be the loss or destruction of stored data. The auditor should see that there are safety devices to protect information stored in this case. In this case, the auditor should also see if there are backup and recovery. These methods include keeping copies of programs and data to a different location than where the computer. Most applications have a building system of maintaining two versions of the computer file, the current and the previous one. The current version contains the changes during the last change made, and the previous version of pre-change. Some computer systems have the same three cases, the current, above the previous version and the previous version to the previous version.

(vi) The code source application software in a safe place?.

The examiner ensure that the source code of the application software under guard of a manager should. There must be access by a duly authorized person (s) and maintain a register of people have access to. “Inherent and control”

(b) review of risks.

The auditor should assess the risks and control large financial irregularities.

Risk assessment and internal control.

Risk

in an environment of electronic data processing may occur for the following:

It can happen to any appropriate procedures for change control program or système.Matériel or faulty software can inaperçus. Pendant can transfer it from loss or damage données.Ordinateurs is easily, and program files are available to unauthorized users can access autorisé.Les fully in the review and approval to ensure their reasonableness and responsibility to obtain the permit.

(c) the effects of inherent and control .

and the risk control in the field of electronic data processing can completely effect on all accounts, or the effect of specific account

:.

(I) risk does not affect all accounts

it of deficiencies in program development, support conservation flexible system, electronic data processing, physical security and access control result, special programs utility privilege. These errors affect all systems of application processed in the computer and cause material misstatements in the financial statements. Specifically,

(ii) at risk:

the special risks can to fraud and error as the summary of recent cases has lead to the inherent risks and control LED:

a) The Dodgers Trolley case-control deficiencies in the accounting transaction cycle allowed for an Accounting Manager to hundreds of thousands of dollars to redirect

b) Goodner Brothers, Inc. -. Employee This tire wholesaler was in serious financial difficulties. To remedy this problem, the staff took the weakness of internal controls use of the employer to steal a large inventory, which he then sold to third parties.

c) is stored Troberg important but often neglected internal controls to ensure “compliance with applicable laws and regulations,” The management of the company has violated the provisions of national law imposing a heavy toll on society money in the process.

Technical Audit

(a) objectives of the test remains the same if the Data processing is manual or computerized .

In the design of audit procedures in an environment of electronic data processing, should bear the examiner in mind two things: ensure

1) adequate compliance and substantive procedures and data are accurate and complete

2) Apply professional skepticism by cross checking of documents, the reconciliation between the primary and secondary books, questions and critical evaluation of evidence. may adopt procedures for this purpose manually assisted on the technical examination of computer, or a combination of both.

Audit “round” or “by” computer

In an environment of electronic data processing, assign an auditor to perform procedures compliance and substantive testing of transactions with the computer, or without them . If it is checked in the traditional way by examining the data and information by the customer’s computer system-generated revenue, it will be around to check on the computer. In this case, the examiner relies exclusively on data and printed information to him by the client.

On the other hand, if the examiner himself the computer to perform compliance and substantive testing procedures used, it will be considered by the computer. However, this requires the auditor and / or its employees have adequate knowledge of electronic data processing.

(b) Computer -. Verification techniques

This can as follows:

1 . test data:

You have a set of test data by the auditors themselves were prepared, or use of such data developed by the internal audit of the customer. Test data include transactions of all types specifically to test for a program or client programs available.