A business uses Electronic Data Interchange (EDI) to exchange information and record transactions
(Messier et al, 2019). Businesses can store data more affordably than at a conventional storage
facility by using EDI. Additionally, EDI makes it simpler and faster for a business to track and
retrieve data than manual paperwork. Communication with others is also more effective when
using EDI. EDI can be safer than traditional paper-based processes thanks to encryptions and other
channels of approval that are not often found in a paper chain of command (Messier et al, 2019).
Companies must have a system that can construct an image-processing system to scan documents
before they can begin to implement an EDI system (Messier et al, 2019). This type of document
storage makes it simple for employees to find it. All the consequences of EDI concerning the audit
depend on how reliable the system is in terms of the data it produces. The transaction's validity
and the EDI system's efficiency may be questioned if a document placed into the system is invalid
with the necessary safeguards in place (Messier et al, 2019).
While examining a company's financial statements, auditors are obligated to consider a wide range
of factors. The type of audit evidence must be considered. d The auditor must understand the
processes of the company to develop an audit plan to test the effectiveness and accuracy of the
EDI system. All EDI systems must have an audit trail attached to all transactions that happen
within that system. The audit trail can then give the auditor an avenue to trace back all the steps
to see what securities are in place to keep the transactions secure. What kinds of data are to be
reviewed during the auditing process? d Data including journal entries, contracts, invoices, and
reports on the industry. The appropriateness and sufficiency of the audit evidence are other
factors. This gauges both the volume and caliber of audit evidence (Messier et al, 2019). The risk
of significant misstatement and the caliber of the provided evidence has an impact on the quality.
The auditor must also be fair, objective, thorough, grasp the type of evidence that is accessible,
and assess it. d This week's reading focused on audit documentation and evidence. Audit evidence
is "information used by the auditor in arriving at the conclusion on which the audit opinion is
based, including the information contained in the accounting records underlying the financial
statements and other sources." Essential aspects of this evidence are its efficiency and
appropriateness. With the advancement of technology, image processing systems have become a
lucrative and time-saving tool for providing accurate information. Using pen and paper can now be
considered "time-consuming, manpower wastage, and inefficient working style." Old-school
bookkeeping can also be inaccurate when overwhelming workloads and timelines require faster
turnover. Image processing offers more reliable completeness and accuracy for documentation. d
Running parallel to the accuracy of information gathering is the exchange of information between
entities, including financial institutions, businesses, customers, and suppliers. Electronic data
exchange (EDI) is "information technology that standardizes the exchange of information between
transacting parties." This comes into play for auditors tracing transactions from their "origin to
their ultimate disposition in the accounting journals and ledgers." The use of EDI places a greater
demand on its users for accuracy and completeness. Furthermore, its services are associated with
better "departmental performance" and offer the benefit of error-free orders regardless of their
simplicity or complexity by its user. The use of technology has a great advantage to the auditing
world as it assists with the ease of audit procedures concerning staffing and reliability.
References
Anderson, S. W., & Lanen, W. N. (2002). Using Electronic Data Interchange (EDI) to Improve the
Efficiency of Accounting Transactions. The Accounting Review, 77(4), 703–729.
Messier, W. Glover, S. Prawitt, D. (2019). Auditing & Assurance Services: A Systematic Approach
11th Edition. McGraw Hill Education.
Vo-Nguyen, T.-A., Nguyen, P., & Le, H.-S. (2021). An Efficient Method to Extract Data from Bank
Statements Based on Image-Based Table Detection. 2021 15th International Conference on
Advanced Computing and Applications (ACOMP), Advanced Computing and Applications (ACOMP),
2021 15th International Conference on, ACOMP, 186–190. https://doi-
org.ezproxy.snhu.edu/10.1109/ACOMP53746.2021.00033
Messier, W. F., Jr. Glover, S. M., & Prawitt, D. F. (2019). Auditing & Assurance Services: A
Systematic Approach (11th ed.). S.l.: McGraw-Hill Education
