Technology has certainly transformed the audit and given rise to a host of new issues,
opportunities, and concerns. d With the advent of technology such as EDI, auditors must expand
their knowledge of how they audit and obtain evidence in an enterprise resource planning (ERP)
environment. As an auditor many years ago, I had the task of auditing the purchasing and
accounts payable cycle. d Many large organizations have ERP systems like Oracle, SAP, and
PeopleSoft. d The processing of accounts payable is housed in all these ERP systems. d Vendors are
often paid through EDI transactions using a three-way match. d Specifically, a vendor is set up in
the system with a specific ID. d A purchase order/requisition, approval and receiving report along
with the invoice are matched. d If it is within the dollar tolerance, the ERP system will generate
payment to the vendor electronically. As an auditor, I would test several transactions for
completeness, approval with appropriate signature (electronically) and approval amounts. d I would
check to see if there were management overrides or exceptions. d I would work with organizational
personnel to run queries and exception reports. d Not to mention, I would check application
controls and determine if tables within the ERP systems were updated according to policy
guidelines. d In today's marketplace, most people purchase goods and services online (e.g.,
Amazon, Walmart, etc.). d Therefore, EDI transactions provide convenience and some new risks
regarding security.
Electronic data exchange or EDI refers to intercompany communication in which business
documents are exchanged in a standard format. It is an important component of electronic
commerce. To ensure the success of EDI, it is important for the trading partners to agree to
leverage a particular data format for conducting business transactions in an effective manner
(Josiah & Izedonmi, 2013). EDI provides businesses freedom from paper. For instance, traditional
documents such as invoices and purchase orders do not exist in the form of papers. In EDI
transactions, information of businesses moves from one computer application of an organization
to another computer application.
Implications of EDI
EDI has significant implications for the auditor's consideration of audit evidence. The use of EDI
can make tasks easier for the auditors as they no longer must deal with a lot of papers. However,
as no or very less paper document exists, the auditor will have to focus on the computer system.
The auditor needs to gain a comprehensive understanding of how the client conducts business
with the use of EDI. After understanding that, they will have to make changes to their audit
procedures and plans accordingly (Josiah & Izedonmi, 2013). The auditors must become familiar
with the use of EDI and possess basic IT skills to better understand the integration of the business
plans with the EDI systems for future growth. The auditors also need to use specific audit
procedures to ensure the effectiveness and adequacy of the internal controls of the clients.
Image-processing Systems
In the digital era, the application of image-processing systems is becoming popular. Image
processing systems are the systems that involve the processing of images taken by a digital
scanner or digital camera. Computer systems are used to process digital images (Salehin et al.,
2020). The core aim is to improve and enhance the visual quality of the images. It helps in
improving the raw images taken by the scanners or cameras.
Implications of Image-processing Systems
Image processing systems also have several implications for the auditor's consideration of audit
evidence. One of the important implications of image processing systems is that it provides the
auditors with a clearer image of the evidence. It will help the auditors to perform auditing in a
more efficient and accurate manner (Patel & Shah, 2022). It can help in eliminating potential
confusion or chances of error owing to the lack of clarity of the image. It allows the auditors to
review the documents and images more effectively and produce accurate reports. It can also help
in improving the efficiencies of the auditors.
References
Josiah, M., & Izedonmi, P. F. (2013). Critical issues in international and electronic audit evidence.
International Journal of Management Sciences and Business Research, 2 (3), 1-14.
Patel, S., & Shah, M. (2022). A Comprehensive Study on Implementing Big Data in the Auditing
Industry. Annals of Data Science, 1-21.
Salehin, I., Talha, I. M., Saifuzzaman, M., Moon, N. N., & Nur, F. N. (2020, October). An advanced
method of treating agricultural crops using image processing algorithms and image data processing
systems. In 2020 IEEE 5th International Conference on Computing Communication and Automation
(ICCCA) (pp. 720-724). IEEE.
