（2004）On line Auditing.docVIP

IT Audit Seminar organized by National Audit Office, China 1 to 4 September 2004 Paper on “On line Auditing” By Ms.Puja S. Mandol and Ms. Monica Verma Supreme Audit Institution of India Introduction The proliferation of corporate-wide networks is enabling progressive integration of worldwide manufacturing, inventory keeping, and financial management. In turn, these developments have substantially reduced the incremental costs and complexity of consolidated reporting and its disclosure to related parties. Widespread availability of computer networking makes it possible to dramatically increase the frequency of periodic audits by redesigning the auditing architecture around online auditing. Online Audit Online audit is a technique, which is used to collect audit evidence at the same time as an application system undertakes processing of data or immediately after the processing is completed, in a paperless environment. It is a type of continuous auditing, which produces audit results at the same time or within a short period after the event has taken place. It is more cost effective and less time consuming. Online Audit has different imperatives for internal and external auditors. For internal auditors it means an audit, which is undertaken by being an integral part of the information system. At every stage the controls and checks are exercised and the outcomes are arrived at, after processing is authenticated and checked by the internal auditors. On the other hand, external auditors take up audit exercise immediately after the processing is complete. External audit is slightly behind online audit, but nonetheless instantaneous as it is immediately taken up after the processing is over. A continuous audit by an external auditor is feasible, if it is implemented as a fully automated process with instant access to relevant events and their outcomes. The only known way to satisfy these requirements is to implement continuous auditing on a network based online computer