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Chapter 7 Computer-Assisted Audit Tools and Techniques

This document discusses various types of application controls for computer systems, including input controls, batch controls, validation controls, processing controls, output controls, and techniques for testing controls. It covers topics such as source document controls, field and record interrogation, error correction methods, transaction logging, audit trails, and black-box vs. white-box testing approaches. Computer-aided audit tools can test controls through methods like using test data, an integrated test facility, and parallel simulation.

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719 views14 pages

Chapter 7 Computer-Assisted Audit Tools and Techniques

This document discusses various types of application controls for computer systems, including input controls, batch controls, validation controls, processing controls, output controls, and techniques for testing controls. It covers topics such as source document controls, field and record interrogation, error correction methods, transaction logging, audit trails, and black-box vs. white-box testing approaches. Computer-aided audit tools can test controls through methods like using test data, an integrated test facility, and parallel simulation.

Uploaded by

Aimerose Obedencio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Computer-Assisted Audit

Tools and Techniques


Chapter 7
Application Controls
• Input Controls
• Source document controls
• Use Pre-numbered Source Documents
• Use Source Documents in Sequence
• Periodically Audit Source Documents
• Data coding controls
• Transcription errors
• Addition errors
• Truncation errors
• Substitution errors
• Transposition errors
• Single transposition errors
• Multiple transposition errors
• Check Digits
• A check digit is a control digit (or digits) added to the code when it is originally assigned that
allows the integrity of the code to be established during subsequent processing.
• Batch controls
• Batch controls are an effective method of managing high volumes of transaction data
through a system. The objective of batch control is to reconcile output produced by the
system with the input originally entered into the system.
• Hash Totals
• The term hash total, which was used in the preceding discussion, refers to a simple control
technique that uses nonfinancial data to keep track of the records in a batch.
• Validation controls
• Input validation controls are intended to detect errors in transaction data before the data
are processed.
• Field interrogation involves programmed procedures that examine the characteristics of
the data in the field.
• Missing data checks are used to examine the contents of a field for the presence of blank
spaces.
• Numeric-alphabetic data checks determine whether the correct form of data is in a field.
• Zero-value checks are used to verify that certain fields are filled with zeros.
• Limit checks determine if the value in the field exceeds an authorized limit.
• Range checks assign upper and lower limits to acceptable data values.
• Validity checks compare actual values in a field against known acceptable values.
• Check digit controls identify keystroke errors in key fields by testing the internal validity of
the code.
• Record interrogation procedures validate the entire record by examining the
interrelationship of its field values.
• Reasonableness checks determine if a value in one field, which has already passed a limit check
and a range check, is reasonable when considered along with other data fields in the record
• Sign checks are tests to see if the sign of a field is correct for the type of record being processed.
• Sequence checks are used to determine if a record is out of order.
• File interrogation ensures that the correct file is being processed by the system.
• Internal label checks verify that the file processed is the one the program is actually calling for.
• Version checks are used to verify that the version of the file being processed is correct.
• Expiration date check prevents a file from being deleted before it expires.
• Input error correction
• Correct Immediately
• Create an Error File
• Reject the Batch
• Generalized data input systems
• Generalized validation module
• The generalized validation module (GVM) performs standard validation routines that are
common to many different applications.
• Validated data file
• This is a temporary holding file through which validated transactions flow to their respective
applications.
• Error file
• Error records detected during validation are stored in the file, corrected, and then resubmitted
to the GVM.
• Error reports
• Standardized error reports are distributed to users to facilitate error correction.
• Transaction log
• The transaction log is a permanent record of all validated transactions.

• Processing Controls
• Run-to-Run Controls
• Recalculate Control Totals
• Transaction Codes
• The transaction code of each record in the batch is compared to the transaction code contained
in the control record.
• Sequence Checks
• The sequence check control compares the sequence of each record in the batch with the
previous record to ensure that proper sorting took place.
• Operator Intervention Controls
• Audit Trail Controls
• Transaction Logs
• Log of Automatic Transactions
• Listing of Automatic Transactions
• Unique Transaction Identifiers
• Error Listing
• Output Controls
• Output controls ensure that system output is not lost, misdirected, or corrupted
and that privacy is not violated.
• Controlling Batch Systems Output
• Output Spooling
• Print Programs
• Bursting
• Waste
• Data Control
• Report Distribution
• End User Controls
• Controlling Real-Time Systems Output
Testing Computer Application Controls
• Black-Box Approach
• Auditors testing with the black-box approach do not rely on a detailed
knowledge of the application’s internal logic.
• White-Box Approach
• The white-box approach relies on an in-depth understanding of the internal
logic of the application being tested.
• Authenticity tests verify that an individual, a programmed procedure, or a message
attempting to access a system is authentic.
• Accuracy tests ensure that the system processes only data values that conform to
specified tolerances.
• Completeness tests identify missing data within a single record and entire records missing
from a batch.
• Redundancy tests determine that an application processes each record only once.
• Access tests ensure that the application prevents authorized users from unauthorized
access to data.
• Audit trail tests ensure that the application creates an adequate audit trail.
• Rounding error tests verify the correctness of rounding procedures.
Computer-Aided Audit Tools and Techniques
for Testing Controls
• Test Data Method
• The test data method is used to establish application integrity by processing
specially prepared sets of input data through production applications that are
under review.
• Creating Test Data
• Base Case System Evaluation
• Tracing
• The Integrated Test Facility
• The integrated test facility (ITF) approach is an automated technique that
enables the auditor to test an application’s logic and controls during its normal
operation.
• Parallel Simulation
• Parallel simulation requires the auditor to write a program that simulates key
features or processes of the application under review.

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