Gaviola, Harold Dave B. BSA-V
Assignment in COMED421/0180/8:30-9:30PM

PSA 401: Auditing in a Computer Information Systems Environment

- The increasing availability of computer-based accounting systems that is capable of meeting both functional and economic circumstances of even the smallest entity impacts on the audits of those entities. Small entities’ accounting systems often make use of personal computers. Philippine Auditing Practice Statement 1001, “CIS Environments—Stand-Alone Personal Computers” gives additional guidance regarding the special considerations of such an environment.
- Small entities are likely to use less sophisticated hardware and software packages than large entities (often “packaged” rather than developed “in house”). Nevertheless, the auditor has sufficient knowledge of the computer information system to plan, direct, supervise, and review the work performed. The auditor may consider whether specialized skills are needed in an audit.
- Because of the limited segregation of duties, the use of computer facilities by a small entity may have the effect of increasing control risk. For example, it is common for users to be able to perform two or more of the following functions in the accounting system.
• Initiating and authorizing source documents.
• Entering data into the system.
• Operating the computer.
• Changing programs and data files.
• Using or distributing output.
• Modifying the operating systems.
- The use of computer information systems by small entities may assist the auditor in obtaining assurance as to the accuracy and appropriateness of accounting records by reducing control risk. Computerized information systems may be better organized, less dependent upon the skills of people using them, and less susceptible to manipulation than non-computerized systems. The ability of the auditor to obtain relevant