An EDI (electronic data interchange) is an exchange of business documents
from computer to computer. This exchange replaces emailing, faxing, or
sending documents by postal mail. The process involves both parties to use an
internal system and must decide on which EDI standard to use. There are
several to choose from such as ANSI, EDIFACT, TRADACOMS and
ebXML. Businesses usually use an EDI translator, either a software or an EDI
service provider to translate the format so that the data can be used. The use of
EDI cuts down on costs, paper and people handling the data. Image processing
is the process of transforming a paper document into an electric file that can be
store, such as scanning a document and saving it as a PDF file.
There are some risks to be considered when a company is using EDI or image
processing systems. One risk would be security and confidentiality. When any
information is being transmitted using the internet there is a risk of hackers and
network break-ins as well as unauthorized users accessing the information.
Another risk would be the integrity of the data. Data could be entered
incorrectly and there may be errors in processing. It may also lead to
incomplete audit trails. Then there is also the risk of systems failing or the
threat of virus attacks. The auditor would want to consider what types of
controls are in place to make sure the information is secure. Having unique
logins and passwords, as well as access levels need to be in place. Making sure
the data is backed up. Also, there should be firewall protection and encryption
being used.
References
(2013). In Accounting Information Systems: The Processes and Controls, 2nd
Edition. Wiley.
(2019). In J. S. William F Messier, Auditing & Assurance Services A
Systematic Approach Seventh Edition. McGraw Hill Education.
What is EDI (Electronic Data Interchange)? (n.d.). Retrieved from EDI
Basics: www.edibasics.com/what-is-edi/
