System Integrity and Validation free essay sample

Computer assisted auditing tools and techniques CAATs is highly recommend for Kudler finer Foods. The ability to share information with clients and auditor’s is one of the selling points. The main selling point of using CAATs is that every avenue of Kudler’s accounting information system will be reviewed and will ensure Kudler Finer Foods that their system integrity is intacted as well as the validation of the system. In the brief to follow will explain why using computer technology and CAATs makes the best business sense. System Integrity and Validation Kudler Finer Foods has come to the accounting firm in search of recommendations regarding the companies, computer information system, automated process of their accounting information system, data table analysis, internal control and risk evaluation, and an audit proposal. Kudler’s recent visit was warranted by concerns of the company’s system integrity and validation. Kudler Finer Foods has an excellent rapport with the accounting firm. We will write a custom essay sample on System Integrity and Validation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The accounting firm will inform Kudler on the selected auditing techniques the accounting firm will use to validate data, and their system integrity. The firm will provide an explanation of the functions of the audit productivity software, followed by an explanation of the uses in the systems design. Computer Assisted Auditing Techniques used to Validate Data and System Integrity In today’s auditing world, companies use accounting information systems to manage the companies business electronically. In the past, before computers aided in the organization of business documents, audits were conducted on paper. Audits are performed using Computer Assisted Audit Tools and Techniques (CAATTs) or Computer Assisted Audit Techniques (CAATs). Computer assisted audit tools and techniques (CAATTs) is defined as the software used to enhance the auditor’s productivity and used to extract data and analysis. The second T in CAATTs refers to the techniques used to enhance the effectiveness and efficiency of the audit. The other form of computer assisted audit tools and techniques is CAAT, which has one t. Because this computer assisted audit has one t, the single t represents techniques. CAATs by definition, has the same meaning as CAATTs with the exception of enhanced auditor’s productivity and extracting data and analysis (Hunton, Bryant, Bagranoff, 2004, p. 78). Using CAATs for information technology audits consists of the auditor’s following 10- steps. Each of the steps will cover a wide area of objectives, processes, and identify different task that need to be performed. The 10- steps to using CAATs will be cover in the PowerPoint presentation. Validating data will be accomplished by running a series o f test data to ensure the system is updating and running properly. The test data is made up by the auditor to establish that the results received are the results the auditor is looking for. This particular type of test will be conducted throughout each of the systems to confirm the each system is working. The integrity of the system will also be tested in a similar style. Testing the integrity of the system occurs in step seven of the 10 step process. Function of Audit Productivity Software Audit Productivity Software aids in the individual auditor’s productivity. Audit productivity software is constructed of five different programs. The five programs start in this sequence, electronic working papers, groupware, ngagement management, reference libraries, and the program document management. Each of these programs enables the auditor’s to complete his or her personal productivity. Electronic working papers were once done manually and can be automated enabling the efficiency of the auditor’s. E-work papers enable the auditor’s to share client’s information and make changes electronically. After the auditor’s have made the appropri ate corrections GAAP compliant financial statement can be generated automatically (Hunton, Bryant, Bagranoff, 2004, p. 179). Groupware allows the clients and other auditor’s to share the information found using a couple of different programs. These programs are common groupware programs the auditor’s and their client’s use such as Lotus Notes, Novell GroupWise, and Microsoft Exchange. The other remaining software’s are Time and Billing, Reference Libraries, and Document Management. The remaining software’s are very important. Time and Billing affect the cash flow because business conducted may be conducted in different time zones and need to be billed correctly to receive payment on time. Reference Libraries are as they sound, company reference libraries store the company’s information is relevant to auditor’s to complete the audit throughout the companies different items. Document management allows the company to save hard copy document to files in the computer that can be viewed easily by auditor’s using the Internet. Audit productivity Software use in the Systems Design Kudler Finer Foods has a strong accounting information system in place serving three different locations. The industry specific accounting information system used by Kudler Fine Foods would benefit from the use of audit productivity software. The reason the audit productivity software would work with Kudler’s system design is because the information can be easily viewed by their auditor’s and clients using the Internet, reducing the travel time the auditors would waste traveling to each of the three location’s. Conclusion Kudler Finer Foods needs to ensure their accounting information system maintains system integrity and validation. System Integrity and Validation free essay sample Preface Kudler Fine Foods located in San Diego, California is a specialty food store that is continuing to grow. Due to the company’s growth, it is necessary for Kudler to make a better use of technology for all aspects of the business. Currently Kudler process a large amount of data through computer programs which is used between all three locations, but with upcoming expansions, Kudler needs the ability to track all of that information and also be confident that the information is reliable. With that being said, Kudler would benefit greatly from Computer Assisted Auditing Techniques (CAATs). It is recommended that Kudler use CAATs, because it will assist with streamlining the IT audit process. CAATs are techniques that â€Å"are used to increase the efficiency and effectiveness of the audit function† (Hunton, Bryant, Bagranoff, 2004, pg. 178). Not only will CAATs assist with making Kudler’s audits go more smoothly, but it will also assist auditors with obtaining more reliable, relevant, sufficient, and useful information. We will write a custom essay sample on System Integrity and Validation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page There are 10 key steps of CAATs that can be implemented that will assist Kudler in creating a framework for their audits. CAATs are divided into two techniques that will be beneficial to Kudler. The first is validating application integrity. The purpose of this technique is to find whether the source code has been compromised. Verifying the overall integrity of the applications is the second CAATs technique. This technique’s objective is to ensure that the data was imported correctly and also to find any irregularities within the data. Due to the fact that the business continues to grow, the use of CAATs will only assist Kudler in its growth. If Kudler goes with the recommendation to incorporate CAATs, it will assist in streamlining the auditing process. System Integrity and Validation Recommendations were made to Kudler to implement CAATs into the auditing process. This implementation will be beneficial to the company as far as validating and verifying information. The use of audit productivity software would allow an organization to streamline and automate processes. Organizations can take it a step further and use audit productivity software to assist with the desi gn of computer software. The following brief will discuss CAATs and audit productivity software. Computer Assisted Auditing Techniques Computer Assisted Auditing Techniques (CAATs) can be used to both validate application integrity and to verify data integrity. Data validation determines whether the source code has been compromised. The applications can be validated through test data, parallel simulation, or integrated test facilities. Test data is simply fabricated data entered into the system by the auditor to test the integrity of the system. For example, the auditor may process a payable through the system by creating a vendor and entering an amount to see the process of actually cutting a check from the system. An integrated test facility (ITF) can test applications as they are used on a daily basis. â€Å"The ITF approach integrates the auditor’s contrived test data through the client’s system along with the normal transaction processing† (Hunton, Bryant, Bagranoff, 2004, pg. 189). During the ITF process, auditors must ensure that the client’s data is not corrupted. All information entered into the system by the auditor should be reversed. Verifying data integrity is ensuring that the data was imported properly and without any irregularities. There are a number of audit tools that can be used to assist with verify integrity such as extracting data, importing it into ACL, and stratifying. Detecting fraud is important when verifying integrity. Audit Productivity Software Functions Audit productivity software provides computerized audit solutions and allows companies to manage and keep track of audit reports. Audit productivity software has a number of functions such as measuring productivity, resource optimization, data management, and automation. Measuring productivity is simply appraising the performance of the organizations audit reporting. By using audit productivity software, auditors and clients are able to get the best use of all of their resources. For example, each staff member’s time will be used adequately. The auditors’ time will be focused on testing the information in the system, instead of spending hours of time sorting through information deciding what to test. The clients can spend their time completing auditor requests. Data management allows auditors and clients to keep track of all of the information entered into the system by the auditors as well as original information entered by clients. Audit productivity software also allows for automation of the auditing process. Information in multiple systems can be integrated with audit productivity software. Automation can streamline the auditing process for any organization, and as mentioned previously, it can increase productivity of not only the auditor but for the client as well. Using Audit Productivity Software for System Design Using the audit productivity software can be beneficial when designing systems for an organization. Audit productivity software can assist with minimizing discrepancies between the company software and the actual audit software. The use of audit productivity software provides functionality to the audit process. That same software could be used to help with the design of an organization’s software systems. Software such as electronic working papers, groupware, and time and billing software can all be implemented when designing software systems. If groupware is implemented these systems would have the ability to not only share files, but schedules and calendars as well. Time and billing software is implemented, auditors can better track time spent within that system according to their unique login. Implementation of electronic working papers assists with everything from daily journal entries to financial statements. Using this software to create a framework for the design of new software would only ensure that audits went smoothly. The audit process can go with little to no incidence, if organizations and auditors would use computerized audit techniques, and audit productivity software. Both the CAATs and the productivity software assist with creating a more automated process. As audit automation increases the time and energy put into the actual audit decreases. Organizations as well as auditors can be more confident that the audit material is reliable and efficient. ? References Apollo Group, Inc. (2011). Kudler Fine Foods. Retrieved from https://ecampus. phoenix. edu/secure/aapd/cist/vop/Business/Kudler2/internet/index. asp Bagranoff, N. A. , Simkin, M. G. , Strand Norman, C. (2008). Core concepts of accounting information systems (10th ed). New York: Wiley Sons.