AUDIT OF COMPUTERIZED ACCOUNTS-AN OVERVIEW.pptx

AUDIT OF COMPUTERIZED ACCOUNTS

1. AUDIT OF COMPUTERIZED ACCOUNTS

2. Introduction to Computerized Accounting Definition: Computerized accounting involves using software applications to manage, process, and record financial transactions. Example software: SAP, QuickBooks, Tally, Oracle. Significance: The majority of modern businesses rely on automated systems for accuracy, efficiency, and real-time reporting.

3. Importance of Auditing Computerized Accounts Accuracy and Completeness : To verify that the automated processes are recording transactions accurately and in full. Security : To ensure that data is protected from unauthorized access, loss, or corruption. Compliance : To ensure the system complies with applicable accounting standards, regulations, and tax laws. Reliability : To ensure the system generates reliable financial reports for decision-making.

4. Steps in Auditing Computerized Accounts System Understanding : Understand the accounting software, processes, and IT infrastructure. Assess Risks : Identify and assess potential risks related to data security, fraud, and errors. Evaluate Internal Controls : Check internal controls within the system (e.g., authorization, segregation of duties). Test Software : Test the application for accuracy in processing financial data, such as performing test transactions and checking the output. Examine Security Measures : Verify encryption, firewalls, backups, and user access restrictions. Review Data Integrity : Check for data corruption or loss, ensuring that the system maintains integrity.

5. Tools for Auditing Computerized Accounts Audit Management Software : Tools like CaseWare or TeamMate help manage audit workflows and track progress. Data Analytics Tools : Programs like IDEA or ACL help auditors analyze large volumes of financial data for irregularities. Forensic Tools : Tools like EnCase or FTK can assist in examining audit trails and detecting fraud or data manipulation. IT Control Testing Tools : Automated tools for testing access control, data backup, and security configurations in IT systems.

6. Techniques for Auditing Computerized Accounts Data Analytics : Use data analytics tools to analyze trends, detect anomalies, and spot irregularities in financial data. Automated Testing : Use automated tools to verify the integrity and accuracy of financial transactions and records. System Walkthroughs : Perform walkthroughs of system processes and procedures to identify potential vulnerabilities. Audit Trails Review : Check logs to trace transaction history, ensuring all changes and entries are documented. Substantive Testing : Test specific transactions and balances to verify that they are recorded properly in the system.