EDP Audit: Important Questions

• What are the different audit approaches in an IT environment?
• “The method of collecting audit evidence and evaluating the same, changes drastically under the EDP auditing.” Discuss the correctness of the said statement. [Nov. 1997, C.A. (Final)]
• The overall objective of audit does not change in an EDP audit. Comment.
• For what reasons audit trail is either lost or sketchy in a computerised environment. What audit techniques can be adopted by the auditor in such circumstances? [Nov. 1995, Nov. 2000 C.A. (Final)]
• What are the different kinds of Internal Controls that should be considered by the auditor to determine the nature, timing and extent of his audit procedures?
• Outline the special points that are required to be considered in establishing and evaluating a system of internal controls for computer applications processed at a service bureau. [May 1999, C.A. (Final)]
• Draw up a check list for evaluation of output controls on accounts maintained under EDP system. [Nov. 1998, C.A. (Final)] (Hint: (i) whether the user department receives the print outs intact; (ii) whether the print outs accurate, timely, comprehensive; (iii) whether these are serially numbered; (iv) whether the source of print out can be traced; (v) how the action is taken on exception report)
• “Where the financial accounting system has not been computerised, the auditor need not verify computerised management system.” Comment. [May 2000, C.A. (Final)] (Hint: Discuss in light of inter-relationship of other business functions with accounting function. If financial system is not computerised, it does not mean that the information generated in other sections have no impact on the manually maintained accounting records)
• Write short notes on: Utility Routine [Nov. 2000] – These are generalised programs that perform necessary but routine jobs in a computer installation. They are controlled by parameters to indicate the particular characteristics of the data or the requirements. There can be three types of utility routines:

Data set utilities are used to manipulate files of stored data. For example, merging a file, copying a file, printing a selected portion of data, or sorting of data.

System utilities are used to simplify the task of knowing where data are stored in a computer file. For example, adding data to a file, naming a set of data, labeling magnetic tapes, or reporting of errors that take place during processing.

Independent utilities perform housekeeping functions such as preparing back up copy, analysing magnetic disk for defective tracks, etc.

• Describe the role of CAATs in an EDP environment.