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Chapter 11

ADM 4346 Chapter Notes - Chapter 11: Database, Analytical Review, Internal Control


Department
Administration
Course Code
ADM 4346
Professor
Sheldon Weatherstone
Chapter
11

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Chapter 11: Auditing Computer-Based Information Systems
Auditing
The systematic process of obtaining and evaluating evidence regarding assertions about
economic actions and events in order to determine how well they correspond with
established criteria
Types of Audits
Financial
oExamines the reliability and integrity of:
Financial transactions, accounting records, and financial statements.
Information System
oReviews the controls of an AIS to assess compliance with:
Internal control policies and procedures and effectiveness in safeguarding
assets
Operational
oEconomical and efficient use of resources and the accomplishment of
established goals and objectives
Compliance
oDetermines whether entities are complying with:
Applicable laws, regulations, policies, and procedures
Investigative
oIncidents of possible fraud, misappropriation of assets, waste and abuse, or
improper governmental activities.
The Audit Process
Planning
Collecting Evidence
Evaluating Evidence
Communicating Audit Results

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Planning the Audit
Why, when, how, whom
Work targeted to area with greatest risk:
oInherent
Chance of risk in the absence of controls
oControl
Risk a misstatement will not be caught by the internal control system
oDetection
Chance a misstatement will not be caught by auditors or their procedures
Collection of Audit Evidence
Not everything can be examined so samples are collected
Observation activates to be audited
Review of documentation
oGain understanding of process or control
Discussions
Questionnaires
Physical examination
Confirmations
oTesting balances with external 3rd parties
Re-performance
oRecalculations to test values
Vouching
oExamination of supporting documents
Analytical review
oExamining relationships and trends
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