What Should Auditors Do When They Receive Electronic Audit Evidence?

What Should Auditors Do When They Receive Electronic Audit Evidence?

Nowadays, you can hardly find a company with cancelled paper cheques and handwritten ledgers. The auditors in audit firms in Johor Bahru examine, inspect and rely on the financial trails when they perform audits and now, electronic data and digital records may make up those trails partially or entirely (Also see Safety Tips to Safeguard Your Online Data). As an auditor, when you verify those records and inspect their contents, you should consider the formats and structure that your customer is using when they present the information. Before sitting down and going through all that electronic information, you need to assess the way your customer monitor and document their finances.

Understand the Sources of Data

Electronic data sources are different from paper-based audit materials as they can exist in a wide range of applications, files, as well as storage media. If the records of your audit clients consist of digital data, you need to know in what form those records may exist so that you may assess the authenticity of those records and the information they carry. Besides, you can ask for proof from the information technology personnel of the company so that you can know more about the integrity, source and condition of those digital records. Also, you probably have to check the formulas in the spreadsheets as well as other calculations to determine the computation’s basis, which gives you the information you need for your assessment.

The Integrity of the Evidence

You cannot find any correction fluid or eraser marks on the electronic records. However, those records may possess high standards of forensic integrity (Also see Types of Audit – Forensic Audit) and data security. No matter there are only some uncomplicated confirmations like the dates of creation and modification of the electronic files, or there are complex processes which might involve the consultations with forensic specialists, you must make sure that the documents you are assessing shows unaltered, original data sources which reflect the company’s condition accurately. If you uncover unjustifiable alterations or other types of tampering throughout your audit process (Also see Essential Processes in the Audit of Financial Statements), you should show the doubtful state of your customer’s records in your audit results.

Data Retention

Due to the lack of codified controls over data retention policies as well as the increasing volume of digital records that the companies are processing, you may need to access to those data that are scheduled for deletion before you start auditing your customer’s records. As an instance, if the audit activities you perform depends on the assessment of messages, emails or other electronic records, you probably have to confirm the deletion schedules of your customer and ask them to exempt certain types of data from regular records removal. Same goes to the digital records of online business transactions, which the customer should download them from the banks before a particular deadline (Also see An Overview of Bank Reconciliation).

Other Considerations

It may be easier for you to look for unusual transactions in the digital records by using the auditing tool kit. Besides, you may have to assess or check supporting documents such as meeting notes and customer communications. Although your primary focus will be on the digital records, you should prioritise the format of the information which shows the genuine source of information. As an instance, a transcription or a scan of the meeting notes about the financial details might not show the facts of the meeting as precisely as the handwritten original.

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