Electronic Data Interchange (EDI):
EDI is a protocol that is maintained by the ANSI (American National
Standards Institute) for the exchange of business transactions via
computer/computer. Basically, EDI allows two businesses with
different softwares to read the same report. Rather than having to
have a report (i.e. purchase order) sent to the receiving company and
manually entered by someone, their system is able to read it due to
EDI. It's a set language that both systems can easily understand.
Image Processing Systems:
Image processing systems allow important information to be
extracted from the software. It's like reading a report and only pulling
what the person needs to know automatically, rather than someone
having to do it manually. This can be used to check for the occurrence
of a transaction and identification and verification of a transaction.
Implication on Audits:
The most obvious implication of this is that most, if not all, of the work
for an audit is done electronically - there will not be a paper file
accompanying the audit like in the old days. Next, more errors are
likely to occur due to lack of review. With EDI, you see more
automation occurring both at the audit level, and management level.
This means less close up review of the documents being processed.
Lastly, it's important to note that any changes to the electronic
systems could wreak havoc on the communications between systems
if not planned for.
Reference:
Messier, W. F., Glover, S. M., & Prawitt, D. F. (2019). Auditing &
Assurance Services: A Systematic Approach. McGraw-Hill Education.
