Computer Assisted Audit Techniques - Math Problem Example

Computer assisted audit techniques Name Number Course Tutor Date Auditing is an accounting process of evaluating a person, company, system, process, enterprise, product or project. This is done by a trained practitioner known as an auditor. The work done is called an audit. It can also be defined as the process of examining of financial statements in an organization. All this is done to test if there are frauds made with the accounting statements. Auditing now a days is made easy through the use of accounting software packages which include IDEA, APEX systematic, ACL, Individual audit system, internet security scanner, HAWK, Computerized Accounting Records Comparison System, WINIDEA, IDEA4 Excel, Word and various others used in different nations across the world. All these are computer aided auditing techniques, which are procedures that are performed through the system or computer. The audit software contains system programs used by auditors as part of the auditing procedures to process facts and figures of audits significance from the entity’s accounting system. The system audit software is a schedule or plan of how processed facts and figures can be extracted for the user’s requirements or needs. It provides real time or ready information to the users and makes it easy to scrutinize large amounts of facts and figures or data. This also stores the proceed facts and figures permanently till they get destroyed or updated by the auditor or responsible programmer (Cascarino 2012) IDEA is strong and user friendly software which is specifically designed for helping financial and accounting professionals. It is used to enhance the auditing and analytical capabilities, detection of frauds, and to ensure that the standards of documentation are met. IDEA also allows one to fast import, link, evaluate, analyze, sample and export or remove or extract the facts and figures from generally all the sources, including reports printed to file. IDEA is generalized auditing software which is the short form for interactive data extraction and analysis. This software is used in various languages from many countries in the world like over a hundred, used by major accounting companies. It was developed by the Canadian institute of chartered accountants and finally by the Case wares IDEA incorporation. This software supports the windows version operating system and was first released to the market in the year 1995. This was not able to effectively work which prompted the emergence of another version in the year 2002 which enjoyed overall satisfaction among its accounting users in compliance with the computer assisted audit techniques. IDEA software is capable of extracting different kinds of facts and figures’ documents, involving the print documents (Coderre 2010).The data repositories are generated in import where the facts and figures of the original files are put or inserted in several different types of fields. Here, the user will be able to browse through that repository or database then look for the expected records, quickly sort it and index the very records, do the extraction of the records hence following certain specific procedure, the search of duplicates and blanks, make the summary and a stratification of records and the export of files like the Microsoft excel. All these measures are fundamentally supported by functions. Functions in IDEA are used in the creation of imaginary fields where the contents are basically determined from other fields. The other functionality involves the pivot tables, Benford analyses, age analyses, joining, sampling, appending the data repository and the drilling down of statistics and other processed facts and figures concerning the IDEA which is logged securely, and can be made use of repetitively. With the help of this software, any firm can be able to minimize the costs of analysis it incurs, give an addition of more quality to the work so as to meet the new professional needs concerning fraud and internal control through the insertion of power of the software to the work for the auditor. The software can obtain or read, present or display, evaluate and analyze, manipulate, sample or get data files from every source like the workstation or mainframe personal computer such as reports printed to a document. IDEA is a simple to use software tool that enables an auditor or accountant to effectively and efficiently work with the clients’ facts and figures in their raw form that is not summarized in a report. This allows the accountant have much greater insight into the clients’ business through the viewing of the business at its lower rate of activity or task which is the transaction. It is then used to analyze the facts and figures and give reports which are summarized. Prior to undertaking any auditing work, the accountants should involve, as part of their planning, considerations as to whether the software should be the best tool for a specific engagement or client. The software can then be used to evaluate, analyze the facts and figures and to produce summed reports. There are various aspects of success associated with the software which include the following: there should be enough space for transactions and their details so that for the accounts receivable, the software workbook will recommend a minimum of two hundred accounts and corresponding a thousand transactions. In order for one to start the use of IDEA in the actual engagements, he or she has to facilitate a series of engagement specific workshops. One main key of successfully linking the software in to any firm’s engagements is a good generation of a well thought out road map that will be developed by the audit sense with input from key professionals in the firm. IDEA as a data analysis software tool is very powerful and assists in increasing the efficiency and effectiveness and also the productivity of the accounting professionals in a firm. It needs the users to gain the ability to easily acquire copies of the client’s facts since the software comes with various tools which help the user in obtaining appropriate facts and figures involving the extraction of popular small business accounting packages like accounting and quickbooks. For efficient and effective use of the software, the persons using these should be sufficiently trained and equipped. Accountants are able to use this software to meet the key audit objectives for receivable accounts like the valuation, accuracy, completeness, existence, validity and cut-off. It is also useful in carrying out analytical review schedules needed for a review engagement (Dietz 2009). The software, IDEA, is well-recognized auditing software as the global against which the rest tools for analyzing facts and figures are measured, hence offering a unique kind of ease of use or operation and powerful functionality. It extends the depth and width of the auditors analysis, enhance personal productivity and renders a confidence in the auditors findings. It is with the help of this software that firms can achieve robust and efficient results, meet professional needs concerning the acts of frauds, uncertainties and internal control, minimize the losses and enhance profitability. As compared to any other auditing or accounting software, the IDEA auditing software consists of various and distinguished features and uses or functions which are not found with other accounting software and they include the following: obtain particular transactions, find the blanks and or duplicates, do the profiling of the facts and figures by summarizing the documents, generate useful file statistics in an automatic manner, do the creation of samples through the use of various different methods of sampling and lastly generate records of all the alterations made to the documents in the database and perform the task of maintenance of the audit trial or log of all operations including the import and audit test undertaken on the data repository. The primary purpose of using this software is to ensure that the financial data of a company is safe and will always be available when needed. It is no doubt that the decision made in the company is based on the latest audited data. As such the integrity off that data is all determined by the auditor that carries out the audit task. IDEA software is customized to solve to address the complexities that face the auditors. In addition, the software reduces the level of expertise that needed to do a good audit because its functionality and usability is user friendly. This I mean the personnel who are that the software is designed in a way that the person using it only does the simple action of entering the data that is audited into the system then all the processing is done by the software. The system is developed in an advanced technology such that the processing that it does is complex but the user interface is very simple. The good thing about this system is that it automatically updates the database in a regular basis such that when the operator wants to produce an audit report, the summery analysis is done and the information about all the transactions done in the company are recorded and stored in a digitalized method. This software is also very reliable because of its ability to interface with different operating system and database servers. The issues surrounding the performance and speed of an audit process can be regarded as a thing of the past because the people who analyze have the intention of promoting their information technology skills in auditing instead of providing audit information that will give room for fraud in determining the most appropriate audit that will serve the intended purpose. The software flexible because it is widely well-supported and maintained program that is coded using strong languages like Ajax that continuously change, and hence curb the challenge that the auditors face is the rate at which changes come I as far as audit techniques are concerned. A program that was developed some 8 months ago to handle audit activities is quite robust in the way it tracks and monitors the events that are possibly to cause a fraud in the company what is developed at the moment because there are a lot of modifications that are made every other time to ensure that any vulnerability that can result into incorrect output is prevented. This affects the willingness of the employee who has the intention to commit a felony because they check for updates regularly. Moreover, IDEA is related to Microsoft’s server environment meaning that its performance is meant extends to the server level regardless of nature of server. The latest development provides the chance to build features that are compliable and hence has made the performance of the audit team better. IDEA is very stable since its design is specifically to execute script on both client/server and the web servers. It facilitates the tracking of financial data that streams in the internet. Since the IDEA flat form is an open source, therefore it is very flexible because the client’s requirement will determine the type of the functional features to be included to create a robust program making it simple and efficient for company employees who uses it. In addition, the language that are integrated in the development and documentation are nine, this means it can track the data that is recorded using multiple languages, therefore the users requirement in terms of scope of solving the problem is addressed since they do have to frequent updated on the audit issues The performance of the audit team can be critically analyzed using different methodologies that will give the best guideline for what to be critically followed up. This is where there is web application system that communicates with the database at a certain interval such that any new finance information is saved and a copy of the same it created to be a back-up. This is by using an integrated IDEA sub-system that is sending a query, process and then sends the findings management via the internet. It is the audit personnel that will facilitate the interface between the issues that has been address and the expected performance in the company. How efficient the operations in the company are has great implication on the functioning of the system because what is fed into the system or the input supplied will be reflected in the output audit process. In addition to tracking the speed of the attaining the set goals by the employees, the system also do the oversight monitoring of the employee’s ability frequency of using the system because some employees can abandon the system with the intention of performing an act that will result into deals that are unclear and this is what matters most to the audit process. A subsystem for comparing the laid down procedures which the management communicates with the stakeholders is also integrated, IDEA is relatively faster than other software because it is able to give the analysis feedback with the time period that can give room for effective measures to be administered. The other benefit is where the application that is used reads and retrieves information from the file system or uses the image replication to create and locates an initial data then forward to the directory. In such a case the coding language used do not have much significance but rather the efficiency of both the file system and the operating system that is involved. Research has proven that it is the type of both the operating system and the file system that bring about the differences but not the programming language that is used (O'Leary 2010) The chief methodology that the system uses in extraction of data from any source including a volatile memory is bits to evidence. This technology used by the system analyzed who has reasons beyond any reasonable doubt to believe that the data in a particular data store needs to be examined because there are errors that are involved and might have resulted into a felony. In a case where the data is kept in a volatile memory, the analyst try to get the responds to questions that are complex and the technical relating to the data that has been gathered. Sample of the data that the analyst will check are the credentials of the user that logged into the system at a particular time when the felony was committed, the networked computers that participated in the event, and the authorized users of those computers, the files that the person accessed and any modification done to it, the program that the person used to get access to that particular file. In order to come up with accurate information about the whole task, an appropriate extraction of the data is done followed by a critical processing using the system and lastly the outcome is concluded. This procedure is a simulation of the automated IDEA that will give an effective output on a given task. The system utilizes the main memory of a computer to ensure that an efficient work is done by aiding multi-processing and at the same time ensure the security. What is contained in the memory at a stipulated time is basically the data that was processed at that particular time. The different format to which this data is in reflects the operation that was performed and it is never a doubt that what is found out is exactly what the person did. At this moment the analyst runs an additional program package that will give the detailed information about the operation including the identity details of the culprit. Once the auditor has gotten this information, the system will prompt for an option which will validate the findings and store in a location that will be save for example the web server such that the security of that information is guaranteed. The only weakness that this software has is that it cannot detect any suspicious action if the computer it is running on has setting that the attacker can customize. In addition all the analysis done by this program is based on system time of which can be customized. Research has shown that the operation that is done when the system clock is altered cannot be detected by the software and therefore there is need for an additional package that is able to address that issue (O'Leary 2010). As such, Apple computer the leading software and hardware vendor has developed an improved version of IDEA call APPLE-IDEA that uses the principles of program decomposition and reverse engineering to critically monitor the actions of the employees as they perform routine jobs such that any diversion from the normal procedures and operation is single about by the system and immediately create an alarm that informs the person in charge to conduct an automated audit immediately (Harel 2009) Generally the degree at which the information technology has impacted on this field is acknowledgeable sine the otherwise audit tasks that previously require high level of expertise has been simplified and made efficient such that it can even be performed by a person who has little knowledge in auditing and at the same time can provide a conclusion that is based on facts and is not bias in any way. IDEA is strong and user friendly software which is specifically designed for helping financial and accounting professionals. It is used to enhance the auditing and analytical capabilities, detection of frauds, and to ensure that the standards of documentation are met. the IDEA auditing software is ideal for audit automation because of various and distinguished features and uses or functions which are not found with other accounting software and they include the following: obtain particular transactions, find the blanks and or duplicates, do the profiling of the facts and figures by summarizing the documents, generate useful file statistics in an automatic manner, do the creation of samples through the use of various different methods of sampling and lastly generate records of all the alterations made to the documents in the database and perform the task of maintenance of the audit trial (Jacksons 2007) The audit software is has boosted the audit team by proving a great deal of value in any audit environment. Their morale has been boosted and also the result is always more reliable and accurate, any organization that has implemented this system have control frauds since the events are detected in early stages References Cascarino, R 2012, Auditor's Guide to It Auditing, John Wiley & Sons. Coderre, D 2010, Computer Aided Fraud Prevention and Detection: A Step by Step Guide, John Wiley & Sons. Coderre, D 2010, nternal Audit: Efficiency Through Automation, John Wiley & Sons. Dietz, J 2009, Project Summary: Evaluation of New and Emerging Technologies, U.S. project agency. Gray, I 2011, The Audit Process: Principles, Practice and Cases, Cengage Learning EMEA. Harel, E 2009, Post audit automation : reengineering beyond the illusion of control, ohn E. Anderson Graduate School of Management at UCLA. Jacksons, A 2007, Computer-assisted Audit Techniques, The Federation. Moeller, R 2009, Brink's Modern Internal Auditing: A Common Body of Knowledge, John Wiley & Sons. O'Leary, D 2010, Artificial Intelligence in Accounting and Auditing: Creating value with AI, Markus Wiener Publishers. Sherer, M 2009, Audit Automation: The Use of Information Technology in the Planning, Controlling and Recording of Audit Work, The Institute of Chartered Accountants of Scotland. Read More