What is EDI? How does its use affect the audit trail?
Electronic data interchange is an arrangement which links the computer systems of two trading partners to expedite sales/purchases. The buying company's purchasing system creates and transmits a purchase order electronically in an agreed format, either directly or through a value-added network. The selling company receives the information, and it is converted electronically into a sales order.
The absence of paper documents in an EDI transaction disrupts the traditional audit trail. This can be compensated for through the use of transaction logs which can be reconciled.
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