SAD-Audit Considerations

A well-designed system should have controls to ensure proper operation of the system. A candidate system fails because of the lack of data control. So accuracy, consistency and maintainability is required to eliminate errors. A system design introduces new controls to detect and check for errors. In designing a new system, the designer should specify the location of error-control points and evaluate them according to he basis of error frequency, cost and timing of error detection. With the help of this information they can create procedures for handling the errors.

PROCESING CONTROLS AND DATA VALIDATION

There are various methods to control processing activities. Batch control is one such method where records are batched into small groups to control totals. Thus in batch processing, as soon as a an error is detected, the batch that contains the errors are reviewed without disturbing other batches. The other programmed checks involved are

1.Completeness check ensures that all fields in a record are present and are read in the proper sequence. In a multiple record check, the program verifies the number of the records that make up a transaction. If an error is detected then the entire group of records is rejected.

2.Consistency check refers to the relevance of one type of data to the another.

For Example a retailer may have a policy extending 30% discount to religious leaders and upto Rs.2000 credit at no interest. An order received from a customer must be checked against these provisions to ensure consistency with the existing policy.

3.Reasonableness check evaluates a transaction against a standard to determine whether it meets the test.

4.Sequence check verifies that data records are in a sequence prior to processing. A check to identify the duplicate records can also be used.

AUDIT TRAIL AND DOCUMENTATION CONTROL

One of the important functions that has to be provided by systems control is an audit trail. An audit trail is a routine designed to allow user, analyst, or the auditor to verify a process or an area in the new system. In a manual system, the audit trial includes journals, ledgers and other documents. But in a computerized system it is difficult for the following reasons
  •  Records stored on a magnetic medium can be read only by a computer and a computer program.
  •  Data processing activities are difficult to observe.
  •  The record sequence is difficult to check without a computer system.
One way to solve this problem is to keep a file on all transactions as they occur.

For example transactions can be recorded on a tape. The audit program then pulls the selected transactions and makes them available for tracing their status.
The proper audit of a system also requires documentation.
  •  It is the base for the review of internal controls.
  •  It provides a reference for system maintenance.
Documentation may be internal or external and it must be complete and consistent. Thus the purpose of auditing is to check the integrity of the controls built into the system
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