Specific Aspects of Auditing in a Computer-Based Environment - Assignment Example

Written Essay Assignment Chapter 7: Problem 2 Control Category Specific Controls Contribution to Data Reliability Input Controls Format Checks Input controls generally appear in the dimension of application control based mechanism, which looks after efficient performances of the transactions relating to varied data transactions (Pearson, n.d.). This specific control makes sure that valuable and reliable information are being inputed in appropriate form. It aids in making the available data reliable by coding exact and precise measuring formats. For instance, the date relating to a sales invoice must be inputed based on numerical format (ACCA, 2011). Compatibility Checks This specific control tends to ensure that the data obtained from one or more fields are compatible with one another. For example, the value of a particular sales invoice is ought to be compatible with the sales amount of tax being charged on the invoice (ACCA, 2011). Processing Controls Management Information System (MIS) Processing controls are attached with developing varied programmed routines (Pearson, n.d.). This particular system acts as an effective specific control in the form of supporting the managers or the supervisors to adopt and apply routine decisions. Specially mentioning, it contributes in maintaining the reliability of data by extracting valuable data from a specific database to compile various important reports. These reports can be reckoned as financial statements, sales analyses and inventory-level based details among others (Collins, 2015). Decision Support System (DSS) It is regarded as an efficient interactive system, which tends to gather, incorporate and analyze data from varied sources. More importantly, it aids in supporting the business managers of an organization to make several routine decisions. The maintenance of data reliability through this particular system could be better understood from the adoption as well as application of relevant decisions while operating different business functions (Collins, 2015). Output Controls Run Control Totals Output controls mainly relate to work upon the performance of the transactions whether input or output. This specific control relating to output segment helps in preserving accuracy and determining the completeness of the different processing outputs. It will be vital to mention that the conception of run control totals would aid in ensuring greater data reliability in the form of various ways. These ways entails authorizing all such data transactions that are already processed, ensuring that no such transactions are being omitted also making sure that unlawful transactions are being added (Alkhatib & Labban, n.d). Distributed Database Systems (DDBS) The perception of DDBS is identified to be dissimilar to that of centralized database system. This is mainly owing to the reason that DDBS tends to distribute and replicate valuable data over numerous locations by storing the same through the use of horizontal or vertical fragmentation. The data reliability from the approach of DDBS can be better understood from the fact that it maintains a consistent state of the databases by employing two-phase commit mechanism. This mechanism tends to build effective communication with the prevailing networks and distributes data in a synchronized manner. Apart from this, the data reliability from the application of the approach concerning DDBS could also be ensured by working upon any sort of communication or media failure (Alkhatib & Labban, n.d). Chapter 8: Problem 11 11. a. General Advantages of Using Computer Audit Software The universal benefits of utilizing computer audit based software mainly include reviewing along with examining the raw data transactions with regards to audit, finding out any sort of prevailing fraudulent act and introducing as well as developing a better sense of direction especially in the audit procedures. On a further note, it will be vital to mention that the application of such software usually finds beneficial in terms of inspecting huge figure of data, which is not possible to conduct the same manually. Specially mentioning, the general advantages of using computer audit software towards assisting several auditing procedures, is to be affirmed that the valuable data being stored in a particular computer system can be accessed independently without relying much upon the information provided by the clients. This, in turn, saves time and helps in controlling varied operational functions with regards to audit in an efficient way. Similar to the provided case of Sachem Manufacturing Company, the internal auditor attached with the same could reap significant benefits in terms of performing varied auditing tests in a controlled and most importantly cost-effective manner. In terms of advantages, it is worth mentioning that the usage of a quality and effective based computer audit software would significantly aid the internal auditor of Sachem to prevent corruption of master files or standing data (Singleton, 2006). b. Procedural Steps to be followed by the Internal Auditor The steps to be followed by the internal auditor of Sachem towards using a generalized audit software based package include scanning, summarizing as well as analyzing the valuable data gathered from various sources and identifying any sort of duplicate item. In this regard, such duplicate items can be duly measured in the form of gaps existed in a check sequence and duplicate invoices among others (Rittenberg, Johnstone & Gramling, 2011). From the perspective of integrated test facility package, the steps to be followed by the internal auditor of Sachem are clearly based on understanding of different strategic objectives, conducting excellent project management based initiatives and promoting change management procedure relating to an incorporated test facility package. Apart from this, the internal auditor of Sachem could also follow the steps of determining appropriate performance based measures and incorporating technical competencies in the operational procedures (Umble, Haft & Umble, 2003). In relation to control flowcharting package, the internal auditor of Sachem could follow the steps of taking decisions regarding the coverage of varied tools to be considered in the package of control flowchart and following a loop of tasks to be considered while following a specific control flowcharting package. From the perspective of program (parallel) simulation along with modeling package perspective, the steps including the simulation of distinct capabilities of a modeling package and imparting special training towards model building are essential to consider by the internal auditor belonging to Sachem (RFF Electronics, 2010). Chapter 9: Problem 12 a. Explanation of the Data Processing System The “process control systems” can be reckoned as the type of data processing mechanism, which has been used in the flowchart, representing the computer processing standards with respect to a sales order system. From a conceptual perspective, the above stated data processing mechanism signifies the adoption as well as the application of innovative technologies towards monitoring as well as controlling varied physical procedures (Collins, 2015). With respect to the flowchart for Problem 12, the “process control systems” could be apparently recognized as establishing a relationship persisting between sales department and computer operations and the functionalities associated with sales ordering system. Based on the flowchart provided, it is affirmed that the “process control systems” would be regarded as an appropriate data processing mechanism, as it tends to examine the procedures based on which the objective of developing an efficient sales order system could be attained (Collins, 2015). b. Explanation of the Major Operational Changes By considering the fact that the data processing mechanism of “process control systems” relating to the flowchart provided can be greatly enhanced by processing all the files based on real time, certain major operational transformations are likely to occur. Such changes can be measured in the form of taking decisions in a distinct manner relating to the procedures being followed in introducing an efficient system of sales order and utilizing the available resources as per the desired levels. Apart from this, the other changes could be apparently noted as scheduling valuable information relating to the process about how sales order system would be developed, maintaining data flow with respect to the stated system and formulating quality architectures to make better progression of the same. It will be vital to mention that the major operational changes will mainly erupt at the time when numerous computer operations are performed by the respective sales department (Oracle, 2012). c. Explanation of the Nature of the Implications The nature of the implications associated with the changes made in operational efficiency can be mainly determined by the consideration of four important variables. These variables generally include variety, visibility, demand variation and volume among others. In this regard, from the perspective of variety element, the implications could be reckoned as controlling capital-intensive based unit expenses and promoting systemization of the operational procedures. With regards to the element of visibility, the implications can be measured in the form of well-defined roles along with responsibilities concerning the system of sales order, dealing effectively with complex business or operational phenomena and promoting flexibility in the decision-making procedure. In relation to demand variation constituent, the implications such as higher use of available resources are essential to be considered. Finally, from the standpoint of volume based element, the implications can be better understood as working efficiently on the time lag persisting between the sales department and computer operations and restricting in making centralization of the operational procedures (Pearson, n.d.). d. A Sketch of the Proposed New System After witnessing major operational changes and the implications of operational efficiency, the following flowchart has been designed: References Alkhatib, G., & Labban, R. S. (n.d.). Transaction management in distributed database systems: the case of Oracle’s Two-Phase Commit. Journal of Information Systems Education, 13(2), 95-104. ACCA. (2011). Specific aspects of auditing in a computer-based environment. Retrieved from http://www.accaglobal.com/content/dam/acca/global/pdf/sa_jan11_CAATs.pdf Collins, K. (2015). Types of information systems. Retrieved from http://catalog.flatworldknowledge.com/bookhub/7?e=collins-ch15_s03 Oracle. (2012). Best practices for real-time data warehousing. An Oracle White Paper, 1-9. Pearson. (n.d.). Operations management. Retrieved from http://www.pearsoned.co.uk/media/OnlinePreview/Slack_9780273731603/assets/pdf/9780273731603_C01.pdf Pearson. (n.d.). Types of information systems controls. Chapter 8: Securing Information Systems, 1-2. Rittenberg, L., Johnstone, K., & Gramling, A. (2011). Auditing: A business risk approach. US: Cengage Learning. RFF Electronics. (2010). Drawing a structured flowchart. Retrieved from http://www.rff.com/structured_flowchart.htm Singleton, T. (2006). Generalized audit software: Effective and efficient tool for today’s IT audits. Journal Online, 1-3. Umble, E. J., Haft, R. R., & Umble, M. M. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146, 241-257. Read More