Chapter 7:
Computer-Aided Audit Tools
and Techniques
IT Auditing, Hall, 3e
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Introduction to Input Controls
Designed to ensure that the transactions that bring
data into the system are valid, accurate, and
complete
Data input procedures can be either:
Source document-triggered (batch)
Direct input (real-time)
Source document input requires human
involvement and is prone to clerical errors.
Direct input employs real-time editing techniques to
identify and correct errors immediately
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Classes of Input Controls
1) Source document controls
2) Data coding controls
3) Batch controls
4) Validation controls
5) Input error correction
6) Generalized data input
systems
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#1-Source Document Controls
Controls in systems using physical source
documents
Source document fraud
To control for exposure, control procedures
are needed over source documents to
account for each one
Use pre-numbered source documents
Use source documents in sequence
Periodically audit source documents
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#2-Data Coding Controls
Checks on data integrity during processing
Transcription errors
Addition errors, extra digits
Truncation errors, digit removed
Substitution errors, digit replaced
Transposition errors
Single transposition: adjacent digits transposed (reversed)
Multiple transposition: non-adjacent digits are transposed
Control = Check digits
Added to code when created (suffix, prefix,
embedded)
Sum of digits (ones): transcription errors only
Modulus 11: different weights per column: transposition and
transcription errors
Introduces storage and processing inefficiencies
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#3-Batch Controls
Method for handling high volumes of
transaction data esp. paper-fed IS
Controls of batch continues thru all phases of
system and all processes (i.e., not JUST an
input control)
1) All records in the batch are processed together
2) No records are processed more than once
3) An audit trail is maintained from input to output
Requires grouping of similar input transactions
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#3-Batch Controls
Requires controlling batch throughout
Batch transmittal sheet (batch control record) Figure
7-1
Unique batch number (serial #)
A batch date
A transaction code
Number of records in the batch
Total dollar value of financial field
Sum of unique non-financial field
Hash total
E.g., customer number
Batch control log Figure 7-3
Hash totals
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#4-Validation Controls
Intended to detect errors in data
before processing
Most effective if performed close to
the source of the transaction
Some require referencing a master
file
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#4-Validation Controls
Field Interrogation
Missing data checks
Numeric-alphabetic data checks
Zero-value checks
Limit checks
Range checks
Validity checks
Check digit
Record Interrogation
Reasonableness checks
Sign checks
Sequence checks
File Interrogation
Internal label checks (tape)
Version checks
Expiration date check
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#5-Input Error Connection
Batch correct and resubmit
Controls to make sure errors dealt with
completely and accurately
1) Immediate Correction
2) Create an Error File
Reverse the effects of partially
processed, resubmit corrected records
Reinsert corrected records in
processing stage where error was
detected
3) Reject the Entire Batch
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#6-Generalized Data Input Systems
(GDIS)
Centralized procedures to manage data input
for all transaction processing systems
Eliminates need to create redundant routines
for each new application
Advantages:
Improves control by having one common
system perform all data validation
Ensures each AIS application applies a
consistent standard of data validation
Improves systems development efficiency
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#6-GDIS
Major components:
1) Generalized Validation Module
2) Validated Data File
3) Error File
4) Error Reports
5) Transaction Log
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Classes of Processing Controls
1) Run-to-Run Controls
2) Operator Intervention
Controls
3) Audit Trail Controls
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#1-Run-to-Run (Batch)
Use batch figures to monitor
the batch as it moves from
one process to another
1) Recalculate Control Totals
2) Check Transaction Codes
3) Sequence Checks
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#2-Operator Intervention
When operator manually enters
controls into the system
Preference is to derive by logic
or provided by system
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#3-Audit Trail Controls
Every transaction becomes traceable from
input to output
Each processing step is documented
Preservation is key to auditability of AIS
Transaction logs
Log of automatic transactions
Listing of automatic transactions
Unique transaction identifiers [s/n]
Error listing
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Output Controls
Ensure system output:
1)
2)
3)
4)
Not misplaced
Not misdirected
Not corrupted
Privacy policy not violated
Batch systems more susceptible to exposure,
require greater controls
Controlling Batch Systems Output
Many steps from printer to end user
Data control clerk check point
Unacceptable printing should be shredded
Cost/benefit basis for controls
Sensitivity of data drives levels of controls
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Output Controls
Output spooling risks:
Access the output file and change
critical data values
Access the file and change the
number of copies to be printed
Make a copy of the output file so
illegal output can be generated
Destroy the output file before printing
take place
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Output Controls
Print Programs
Operator Intervention:
1) Pausing the print program to load output paper
2) Entering parameters needed by the print run
3) Restarting the print run at a prescribed checkpoint after a
printer malfunction
4) Removing printer output from the printer for review and
distribution
Print Program Controls
Production of unauthorized copies
Employ output document controls similar to source document
controls
Unauthorized browsing of sensitive data by employees
Special multi-part paper that blocks certain fields
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Output Controls
Bursting
Supervision
Waste
Proper disposal of aborted copies
and carbon copies
Data control
Data control group verify and log
Report distribution
Supervision
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Output Controls
End user controls
End user detection
Report retention:
Statutory requirements (govt)
Number of copies in existence
Existence of softcopies (backups)
Destroyed in a manner consistent
with the sensitivity of its contents
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Output Controls
Controlling real-time systems output
Eliminates intermediaries
Threats:
Interception
Disruption
Destruction
Corruption
Exposures:
Equipment failure
Subversive acts
Systems performance controls (Ch. 2)
Chain of custody controls (Ch. 5)
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Testing Computer Application
Controls
1) Black box (around)
2) White box (through)
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Testing Computer Application
Controls Black Box
Ignore internal logic of application
Use functional characteristics
Flowcharts
Interview key personnel
Advantages:
Do not have to remove application from
operations to test it
Appropriately applied:
Simple applications
Relative low level of risk
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Testing Computer Application
Controls White Box
Relies on in-depth understanding of the
internal logic of the application
Uses small volume of carefully crafted,
custom test transactions to verify specific
aspects of logic and controls
Allows auditors to conduct precise test with
known outcomes, which can be compared
objectively to actual results
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White Box Test Methods
1) Authenticity tests:
Individuals / users
Programmed procedure
Messages to access system (e.g., logons)
All-American University, student lab: logon, reboot,
logon *
2) Accuracy tests:
System only processes data values that conform
to specified tolerances
3) Completeness tests:
Identify missing data (field, records, files)
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White Box Test Methods
4) Redundancy tests:
Process each record exactly once
5) Audit trail tests:
Ensure application and/or system creates an
adequate audit trail
Transactions listing
Error files or reports for all exceptions
6) Rounding error tests:
Salami slicing
Monitor activities excessive ones are serious
exceptions; e.g, rounding and thousands of
entries into a single account for $1 or 1
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Computer Aided Audit Tools and
Controls(CAATTs)
1) Test data method
2) Base case system evaluation
3) Tracing
4) Integrated Test Facility [ITF]
5) Parallel simulation
6) GAS
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#1 Test Data
Used to establish the application processing
integrity
Uses a test deck
Valid data
Purposefully selected invalid data
Every possible:
Input error
Logical processes
Irregularity
Procedures:
1) Predetermined results and expectations
2) Run test deck
3) Compare
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#2 Base Case System
Evaluation (BCSE)
Variant of Test Data method
Comprehensive test data
Repetitive testing throughout SDLC
When application is modified, subsequent test
(new) results can be compared with previous
results (base)
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#3 Tracing
Test data technique that takes step-by-step
walk through application
1) The trace option must be enabled for the application
2) Specific data or types of transactions are created as
test data
3) Test data is traced through all processing steps of
the application, and a listing is produced of all lines of
code as executed (variables, results, etc.)
Excellent means of debugging a faculty
program
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Test Data: Advantages and Disadvantages
Advantages of test data
1) They employ white box approach, thus providing explicit
evidence
2) Can be employed with minimal disruption to operations
3) They require minimal computer expertise on the part of
the auditors
Disadvantages of test data
1) Auditors must rely on IS personnel to obtain a copy of
the application for testing
2) Audit evidence is not entirely independent
3) Provides static picture of application integrity
4) Relatively high cost to implement,
auditing inefficiency
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#4 Integrated Test Facility
ITF is an automated technique that allows auditors
to test logic and controls during normal operations
Set up a dummy entity within the application system
1) Set up a dummy entity within the application system
2) System able to discriminate between ITF audit module
transactions and routine transactions
3) Auditor analyzes ITF results against expected results
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#5 Parallel Simulation
Auditor writes or obtains a copy of the program that
simulates key features or processes to be reviewed
/ tested
1) Auditor gains a thorough understanding of the application
under review
2) Auditor identifies those processes and controls critical to
the application
3) Auditor creates the simulation using program or
Generalized Audit Software (GAS)
4) Auditor runs the simulated program using selected data
and files
5) Auditor evaluates results and reconciles differences
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