What portion, if any, of the accounting system will likely require the assistance of an IT systems auditor, who evaluates evidence existing only in electronic form?

Question

What will be an ideal response?

Answer 1

The computerized sales system automatically updates the perpetual inventory records on a daily basis.
The perpetual inventory records are stored on the store's computer server. Because the system does not
generate any paper audit trail (e.g., reports) of the perpetual inventory updates, it will be difficult for
the auditor to verify the accuracy of inventory updates using traditional paper-based audit techniques.
In this situation, the most effective tests of the inventory updates will likely involve the use
of an IT audit specialist who will develop audit procedures that evaluate electronic evidence of the
transaction updates to the inventory master file. The IT auditor may decide to use a test data approach
whereby the auditor obtains a copy of the client’s actual update program software and tests the accuracy
of the software using a test data sample of sales transactions. Given that the auditor develops the
sample data to be tested, the auditor compares his or her expectation of the outcome to actual output
generated using the controlled copy of the client’s software. Alternatively, the auditor may decide to
use a parallel simulation approach whereby the auditor processes actual client live data using an auditor
developed software program that performs tasks identical to the client’s inventory update software.
In this situation, the auditor reconciles the client-generated output to the auditor-generated output.
Either of these strategies require planning and coordination with client IT personnel to ensure that
necessary electronic files and programs will be available for auditor use.