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    Psa 401

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    novy
    The document discusses considerations for auditors when clients use computer information systems (CIS) and personal computers. It notes that small entities often use less sophisticated software on personal computers. The limited segregation of duties in small entities that use CIS may increase control risk for the auditor. However, well-organized CIS can also help auditors by reducing control risk through more accurate accounting records that are less dependent on users.

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    Psa 401

    Uploaded by

    novy
    547 views5 pages
    The document discusses considerations for auditors when clients use computer information systems (CIS) and personal computers. It notes that small entities often use less sophisticated software on personal computers. The limited segregation of duties in small entities that use CIS may increase control risk for the auditor. However, well-organized CIS can also help auditors by reducing control risk through more accurate accounting records that are less dependent on users.

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    PSA 401

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    The document discusses considerations for auditors when clients use computer information systems (CIS) and personal computers. It notes that small entities often use less sophisticated software on personal computers. The limited segregation of duties in small entities that use CIS may increase control risk for the auditor. However, well-organized CIS can also help auditors by reducing control risk through more accurate accounting records that are less dependent on users.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    547 views5 pages

    Psa 401

    Uploaded by

    novy
    The document discusses considerations for auditors when clients use computer information systems (CIS) and personal computers. It notes that small entities often use less sophisticated software on personal computers. The limited segregation of duties in small entities that use CIS may increase control risk for the auditor. However, well-organized CIS can also help auditors by reducing control risk through more accurate accounting records that are less dependent on users.

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    PSA 401 – CIS Environment

    (withdrawn)W h e n t h e C I S a r e
    significant, the auditor is
    required to obtain an
    understanding of the CIS
    environment and whether it
    may influence the assessment
    risks.PSA 401: Auditing in a
    Computer Information Systems
    Environment461. The increasing
    availability of computer-based
    accounting systems that are capable
    of meeting both functional and
    economic circumstances of even the
    smallest entity impacts on the audits
    of those entities. Small entities’
    accounting systems often make use
    of personal computers. Philippine
    Auditing Practice Statement 1001,
    “CIS Environments—Stand-Alone
    Personal Computers” gives additional
    guidance regarding the special
    considerations of such an
    environment. 62. Small entities are
    likely to use less sophisticated
    hardware and software packages than
    large entities (often “packaged”
    rather than developed “in house”).
    Nevertheless, the auditor has
    sufficient knowledge of the computer
    information system to plan, direct,
    supervise, and review the work
    performed. The auditor may consider
    whether specialized skills are needed
    in an audit.63. Because of the limited
    segregation of duties, the use of
    computer facilities by a small entity
    may havethe effect of increasing
    control risk. For example, it is
    common for users to be able to
    perform two or more of the following
    functions in the accounting system.•
    Initiating and authorizing source
    documents. • Entering data into the
    system. • Operating the computer. •
    Changing programs and data files. •
    Using or distributing output. •
    Modifying the operating systems. 64.
    The use of computer information
    systems by small entities may assist
    the auditor in obtaining assurance as
    to the accuracy and appropriateness
    of accounting records by reducing
    control risk. Computerized
    information systems may be better
    organized, less dependent upon the
    skills of people using them, and less
    susceptible to manipulation than non-
    computerized systems. The ability of
    the auditor to obtain relevant reports
    and other information may also be
    enhanced. Good computerized
    systems facilitate accurate double
    entry and the reconciliation of
    subsidiary ledgers with control
    accounts.

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