NCJ Number
70304
Journal
US Army Audit Agency Bulletin Dated: (December 1965) Pages: 31-52
Date Published
1965
Length
22 pages
Annotation
Ways by which the auditor can cope with the ever-increasing use of electronic data processing equipment in Government and industry operations are outlined.
Abstract
The most basic touching point between auditing and automatic data processing (ADP) is introduced as the audit of the input or source data; descriptions for performing that audit touch on the conventional around-the-computer approach and on the approach that uses the computer itself to perform the audit. In respect to the latter approach, the processing of a test deck of dummy transactions through the system is outlined. Further through-the-computer approaches are considered; e.g., the use of reference tables, simulated procedures, review of computer programs, and the program control technique. Advantages in using the computer in auditing are detailed, with explanations of the use of the computer in sampling randomly or systematically, in comparing data on separate records for correctness and consistency, in tabulating the results of manual reviews of accounting transactions, and in checking mathematical computations. The relationship that must be developed between technicians and auditors in working with computers is addressed, along with the role conflicts inherent in such a relationship. Audit responsibilities beyond the audit of information processed and stored by computers are defined, such as evaluating (1) the buy or lease decisions, (2) the extent of time sharing (3) reporting of utilization time, and (4) the economy and efficiency of data processing operations. Services auditors can render in additional respects are considered, such as giving assistance to computer operators in system design, system conversion, equipment evaluation, and equipment selection. The advantages of combining computer technology and management science are briefly explored, with emphasis on the need for expanding the auditor's role in conducting audit analyses in the management area. Finally, attention is given to equipment advances in computer hardware, and to computer terminology as two areas with which auditors must become familiar. Eleven references and supporting tables and graphs are provided. For related documents, see NCJ 70301-03 and 70305.