Para 2.1.18 — MSO (Audit)
Original Rule Text
2.1.18 System analysis: This involves the identification of anomalous items within an account balance rather than a macro level analysis of the balance itself. The approach would be to scan or analyse individual entries in transaction listings so as to locate unusual entries or abnormalities. This procedure may be fruitfully used during the execution stage. However, since it may involve scrutiny of numerous transactions, it may be time consuming if performed manually. If the data is computerized, use of appropriate auditing software could significantly aid the adoption of this procedure.
What This Means
System analysis is an analytical technique that scans individual entries within an account balance to find unusual or anomalous items, rather than looking at the balance as a whole. It involves reviewing transaction listings to spot entries that look out of place. This technique is best used during the execution stage. It can be time-consuming when done manually but becomes much more efficient when auditing software is used on computerized data.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Focuses on individual entries within an account, not the overall balance
- 2Scans transaction listings for unusual or anomalous items
- 3Best used during the execution stage of audit
- 4Can be time-consuming if performed manually
- 5Computer-assisted audit tools significantly speed up this analysis
Practical Example
An auditor reviewing a department's telephone expense account uses auditing software to sort all 5,000 phone bills by amount. The scan reveals three entries exceeding Rs 1 lakh each — highly unusual for office phones. Investigation shows these were personal international calls made by a senior officer, which should have been recovered from salary.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
How is system analysis different from other analytical techniques?▼
Why is computerization important for system analysis?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.