Notes in Auditing (CIS)
Overview
With the rapid development in technology in recent years, computer information systems (CIS)
have become feasible, perhaps essential, for use even in small scale of business operations.
Almost all entities now use computer to some in their accounting systems.
This widespread use of computers has offered new opportunities for professional accountants
and has also created some challenging problems to auditors.
Regardless of the extent of computerization of the methods of data processing being used, the
responsibility for the establishment and implementation of appropriate internal control systems
rests with management and those charged with governance.
The auditor’s responsibility is to obtain an understanding of the entity’s internal control system
to be able to assess control risk and determine the nature, timing and extent of tests to be
performed.
What is Computer Information System?
It is a system that is composed of people and computers that processes or interprets
information. The term is also sometimes used to simply refer to a computer system with
software installed.
Lack of visible transaction trails
Computer Information System Manual System
Data can be entered directly into the It is normally possible to follow a
computer system without supporting transaction through the system by
documents. Furthermore, record and files examining source documents, entity’s
may not be printed and can not be read records, and financial reports.
without using the computer.
Consistency of Performance
Computer Information System Manual System
CIS performs functions exactly as In manual system, just an incorrect
programmed. If the computer is program could be very devastating
programmed to perform a specific data because it will result to consistently
processing task it will never get tire of erroneous data processing.
performing the assigned task in exactly the
same manner.
Ease of Access to Data and Computer Programs
Computer Information System Manual System
Data and computer programs may be Data cannot be altered since data was
accessed and altered by unauthorized manually made by the authorized
persons leaving no visible evidence. personnel.
It is also important that appropriate
controls are incorporated to the system to
limit the access to data authorized
personnel.
Concentration of Duties
Computer Information System Manual System
Proper segregation of duties is an essential Segregation of duties are still being
characteristic of a sound internal control implemented.
system. However, because of the ability of
the computer to process data efficiently,
there are functions that are normally
segregated in manual processing that are
combined in a CIS environment.
System generated transaction
Computer Information System Manual System
Certain transactions may be initiated by Source documents are still needed in order
the CIS itself without the need for an input for the data to be processed in the system.
document.
Vulnerability of data and program storage media
Computer Information System Manual System
The information on the computer can be The records are written in ink on
easily changed, leaving no trace of the substantial paper. The only way to lose the
original content. information is to lose or to destroy the
physical records.
