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Handling Deleted Transactions in Audits

The document discusses three techniques used to preserve the audit trail in computer-based accounting systems: transaction logs, transaction listings, and error listings. Transaction logs provide a permanent record of successful transactions, while transaction listings document all processed transactions for reconciliation purposes. Error listings track unsuccessful transactions to support correction and resubmission, ensuring the integrity of the accounting information system.

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Kenesis
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24 views1 page

Handling Deleted Transactions in Audits

The document discusses three techniques used to preserve the audit trail in computer-based accounting systems: transaction logs, transaction listings, and error listings. Transaction logs provide a permanent record of successful transactions, while transaction listings document all processed transactions for reconciliation purposes. Error listings track unsuccessful transactions to support correction and resubmission, ensuring the integrity of the accounting information system.

Uploaded by

Kenesis
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.

QUESTION 3:

The presence of an audit trail is critical to the integrity of the accounting information system.
Discuss three of the techniques used to preserve the audit trail.

Techniques that can be used to preserve audit trails in computer based accounting systems:

1) Transaction Logs
After the system successfully processes all transactions, these transactions should be
recorded on a transaction log that serves as a journal. Firstly, transaction log is crucial as
it is a permanent record of transactions. As compared to the validated transaction file, a
temporary file that is produced during the data input phase, all records on this file will be
erased after the transactions have been processed in order to have the next batch of
transactions. Secondly, transaction log contains only successful transactions, those that
have changed account balances. On the other hand, not all records in the validated
transaction file may be successfully processed as these records may fail tests in the
subsequent processing stages.

Transaction logs are able to preserve audit trails because all the successful transactions
recorded on transaction logs will generate a hard copy transaction listing that is produced
by the system. These listings should go to the appropriate users to facilitate reconciliation
with input.

2) Transaction Listing
Any kind of transaction has been processed, The system should produce a documentation
of transaction listing in hardcopy of all successful transactions. These listings should go
to the appropriate users to facilitate reconciliation with the input. For example, a listing of
cash receipts processed will go to the controller to be used for a bank reconciliation. Logs
and listings of automatic transactions should be produced for transactions received or
initiated internally by the system.

3) Error listing
As mentioned above, only successful transactions go to transaction log whereas
unsuccessful transactions will be put in the error file. So, a listing of all error records
should go to the appropriate user in order to support the error correction process followed
by the resubmission process where it will be put back in the transaction file. Next, it will
go through subsequent initial processing stages in order to be put in transaction log once
the transaction is successful. Similarly, error listing is able to preserve the audit trail since
it helps in facilitating the reconciliation with input. Both transactions in the transaction
log and error file complete all the records.

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