Auditing through the computer

See here https://www.accaglobal.com/in/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/technical-articles/auditing-computer-environment.html – the “audit trail” is what allows the auditor to trace an individual transaction from initiation to inclusion in the financial statements.

So – sales order -> GDN -> sales invoice -> revenue/receivables a/cs (via sales day book)

Suppose a sales clerk just inputs the products sold from the GDNs and the computer automatically prices up the goods – or that automatic promotional discounts are applied automatically (e.g. in a particular month). These processes aren’t visible – the auditor can’t look at the output and “match” it with the input to confirm that it is complete and accurate. The auditor will therefore seek to rely on the controls that management has put in place to ensure that automated processes are applied correctly – e.g. prices are from a current price list, discounts are calculated correctly, etc. So the auditor will use a package of test data to test the controls are operating effectively – and if not – there will be a problem (!)

You’re very welcome!