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. EDI (electronic data
interchange) and image-processing systems
I do not know very much about electronic data interchange and image-processing systems. For the
most part it seems to be a platform for business partners to send important business documents
to one another. It seems like this is a major shift from a system that use to be completely reliant
on paper products. d EDI is a useful system for industries like healthcare and automotive. A few
benefits of electronic system would include: a reduction in errors, less paper waste, time
management, convenience, and overall better record keeping. However, it is important for an
auditor to keep in mind the availability of the document or record and how long that document
has existed for. This is necessary for the test of controls and the extent that the auditor uses those
substantive tests. So, although there are benefits to electronic interchange there are negative
implications as well. For example, the electronic evidence must be properly accessed by the
auditor. Then once accessed, it must be easily understood and usable by the auditor. Also, being
able to differentiate between purposeful errors and errors on the computer must be done. There
may be limited access to the evidence and the data may have been changed. Distinguishing
between fraud and clerical error must be done through careful procedure.
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/
Williamson, A. L. (1997, February 1). The implications of electronic evidence. Journal of
Accountancy. Retrieved September 15, 2022, from
https://www.journalofaccountancy.com/issues/1997/feb/implic.html
