（2008） The Development of a Computer Auditing System Sufficient for Sarbanes-Oxley Section 404 - A Study on the Purchasing and Expenditure Cycle of the ERP System.pdfVIP

THE DEVELOPMENT OF A COMPUTER AUDITING SYSTEM SUFFICIENT FOR SARBANES-OXLEY SECTION 404 - A STUDY ON THE PURCHASING AND EXPENDITURE CYCLE OF THE ERP SYSTEM She-I Chang, National Chung Cheng University, 168 University Road, Min-Hsiung, Chia-Yi Taiwan, actsic@.tw Cheng-Chih Wu, National Chung Cheng University, 168 University Road, Min-Hsiung, Chia- Yi Taiwan, change.wuu@ I-Cheng Chang, National Chung Cheng University, 168 University Road, Min-Hsiung, Chia- Yi Taiwan, changbenson@.tw Abstract After Section 404 of the Sarbanes-Oxley Act was released, developing an effective computer auditing system became critical for management and auditors. In this study, the researchers used Gowins Vee, raised as a research strategy by Novak and Gowin (1984). On the theoretical side, the researchers arranged documents and employed an expert questionnaire to identify 8 operational procedure elements and 34 critical factors for the purchasing and expenditure cycle. The application side was built upon the model. The researchers then developed the computer auditing system based on the developments of this study. To test the suitability of the system, the researchers conducted a case study whose results showed that this system can provide the company owners and their accountants with a simple, continuous, timely, and analytical method which may help them detect promptly any irregular internal control issues, thus identifying measures to improve the condition. Key Words: Computer Auditing, Internal Control, Purchasing and Expenditure, Sarbanes-Oxley Act 1 INTRODUCTION The Enron scandal in 2001 has had a great impact on many investors’ confidence. Pressured by investors and criticism, the United States Congress hastily passed the Sarbanes-Oxley Act (SOX) of 2002 into law. The most contentious aspect of SOX is