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NCJ Number: 68085 Find in a Library
Title: STATEMENT ON AUDITING STANDARDS N 3 - THE EFFECTS OF EDP (ELECTRONIC DATA PROCESSING) ON THE AUDITOR'S STUDY AND EVALUATION OF INTERNAL CONTROL
Journal: JOURNAL OF ACCOUNTANCY  Volume:139  Issue:2  Dated:(FEBRUARY 1975)  Pages:72-76
Author(s): ANON
Corporate Author: American Institute of Certified Public Accountants
United States of America
Date Published: 1975
Page Count: 7
Sponsoring Agency: American Institute of Certified Public Accountants
Jersey City, NJ 07311-3881
Format: Article
Language: English
Country: United States of America
Annotation: THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS' STATEMENT DESCRIBES THE EFFECTS OF COMPUTERIZED SYSTEMS ON ACCOUNTING CONTROLS AND AUDITOR'S EVALUATIONS.
Abstract: ISSUED IN DECEMBER 1974, THESE STANDARDS SHOULD BE READ IN CONJUNCTION WITH SECTION 320 OF THE STATEMENT ON AUDITING STANDARDS (SAS) NO. 1 WHICH ADDRESSES INTERNAL CONTROLS. BEGINNING WITH A DISCUSSION OF THE EFFECTS OF VARIOUS DATA PROCESSING METHODS ON ACCOUNTING CONTROLS, THE STATEMENT EMPHASIZES THAT AUDITORS DEALING WITH SYSTEMS THAT USE COMPUTERS MUST LEARN ABOUT ELECTRONIC DATA PROCESSING. GENERAL CONTROL PROCEDURES THAT RELATE TO ALL DATA PROCESSING ACTIVITIES AND APPLICATION CONTROLS THAT MONITOR SPECIFIC TASKS ARE DISCUSSED. COMPUTER SYSTEMS OFTEN PLACE PERSONS IN INCOMPATIBLE FUNCTIONS WHERE THEY HAVE THE OPPORTUNITY TO BOTH PERPETUATE AND CONCEAL IRREGULARITIES. TYPES OF INCOMPATIBLE FUNCTIONS AND COMPENSATING CONTROLS ARE DESCRIBED. CONTROLS OVER EXECUTION AND RECORDING OF TRANSACTIONS BY DATA PROCESSING METHODS ARE EXAMINED. EFFECTIVENESS, IT IS EMPHASIZED, DEPENDS NOT ONLY ON THE RECORDING AND TRANSMITTING PROCEDURES, BUT ALSO ON USERS OF THE DATA REPORTING ERRORS. ACCESS TO ASSETS BY DATA PROCESSING PERSONNEL IS COVERED. STEPS IN AN AUDITOR'S REVIEW OF AN ACCOUNTING CONTROL SYSTEM WHICH USES COMPUTERS ARE OUTLINED, THE SUCCESS OF THE REVIEW DEPENDING ON THE AUDITOR'S ABILITY TO ASSESS THE SIGNIFICANCE OF THE DATA PROCESSING OPERATIONS TO THE ENTIRE ACCOUNTING SYSTEM AND DETERMINE THE EXTENT OF THE AUDIT. THE STANDARDS DESCRIBE SITUATIONS WHERE TEST OF COMPLIANCE ARE NECESSARY TO PROVE THE APPLICATION OF PROPER ACCOUNTING CONTROLS. EVALUATION OF THE ELECTRONIC DATA PROCESSING ASPECTS OF AN ACCOUNTING SYSTEM SHOULD BE AN INTEGRAL PART OF THE AUDITOR'S REVIEW. REFERENCES TO RELEVANT SAS'S ARE PROVIDED. (MJM)
Index Term(s): American Institute of Certified Public Accountants (CPAs); Auditing standards; Computer crime prevention measures; Computers
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=68085

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