Electronic Data Exchange aka EDI is the data exchange between two computers or system
connections that are transmitted and received instantaneously. EDI replaces the paper
documents such as purchase orders, invoices, shipping documents, etc. which would
usually take time to process. (IBM, 2022) The use of EDI presents audit and control
issues. For example, the auditor will be dependent on the EDI system so if there should be
any errors, they would be difficult to detect thus the financial data may be overstated or
understated. Although EDI is simpler, the auditor loses the audit that paper documents
would provide. (Glenn L. Helms and Janencino, 1998)
Image processing converts paper documents to a readable electronic format. One issue
with image processing is validating that the document image is correct to its true form to
ensure no modifications were done to the document after it was received. a To test this, the
auditor could conduct a test by sending a document and verifying if the same document
was received without any changes. The auditors should also test the controls if
unauthorized personnel have access to passwords that would allow any changes to the
document image. (Glenn L. Helms and Janencino, 1998)
The auditor is ultimately responsible for confirming that the financial statements are
accurate so all tests should be completed to eliminate any misstatements. (Messier
Glover, & Prawitt, 2018)
References
BY GLENN L. HELMS AND JANENCINO. (1998, April 1). The electronic auditor.
Retrieved from https://www.journalofaccountancy.com/issues/1998/apr/helms.html
Messier, W. F., Glover, S. M., & Prawitt, D. F. (2018). Auditing & assurance services: A
systematic approach (11th ed.). New York, NY: McGraw-Hill Education.
What is EDI: Electronic data interchange? (n.d.). Retrieved from
https://www.ibm.com/topics/edi-electronic-data-interchange
