Para 3.22.17 — MSO (Audit)
Original Rule Text
3.22.17 Computer audit techniques are employed for:
(i) independent verification of ledger balances and control totals;
(ii) re-calculation of critical computerised calculations to verify their correctness;
(iii) range checks to verify the efficient functioning of computer-based controls and test for exception conditions;
(iv) testing the validity of data stored in the master file;
(v) detection of data abuse/frauds; and
(vi) substantive testing with large volumes of data which is difficult, if not impossible, in a manual audit process.
What This Means
Computer audit techniques serve six main purposes: independently verifying ledger balances and control totals, recalculating critical computerised calculations, performing range checks to test computer-based controls, testing validity of master file data, detecting data abuse and fraud, and enabling substantive testing of large data volumes that would be impractical to audit manually.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Independent verification of ledger balances and control totals
- 2Re-calculation of critical computerised calculations for accuracy
- 3Range checks verify functioning of computer-based controls
- 4Testing validity of master file data ensures data integrity
- 5Detection of data abuse and fraud through automated analysis
- 6Enables audit of large volumes impossible to check manually
Practical Example
The auditor uses computer techniques to audit a state transport corporation's ticket revenue system. They re-calculate daily revenue totals for all 500 routes and find discrepancies in 12 routes. A range check on ticket prices flags 200 tickets priced below the minimum fare — all from the same terminal. Master file analysis reveals that 3 conductor IDs belong to retired employees. These findings point to systematic fraud at one bus depot.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is a range check?▼
Why is master file testing important?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.