Para 3.22.69 — MSO (Audit)
Original Rule Text
3.22.69 Output from one IT system may form the input to another system, before finally being reflected in the financial statements. For example, the output from a feeder system such as payroll could be transferred, as input, to the general ledger. Where this is the case, the auditor should look for controls to ensure that the outputs are accurately transferred from one processing stage to the next. A further example would be where the output from a trial balance is used as the input for a word-processing or spreadsheet package, which then reformats the data to produce the financial statements.
- Master/Standing Data File Controls
What This Means
Output from one IT system often serves as input to another system before finally reaching the financial statements. For example, payroll system output may feed into the general ledger, or trial balance output may be reformatted through a spreadsheet to produce financial statements. Wherever output from one system becomes input to another, the auditor must check for controls ensuring accurate and complete transfer between processing stages.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Output from one system frequently serves as input to another system
- 2Data may pass through multiple systems before reaching financial statements
- 3Controls must ensure accurate transfer between processing stages
- 4Common example: payroll output feeding into the general ledger
- 5Spreadsheet reformatting of system output is another transfer point requiring controls
Practical Example
A government department's payroll system generates monthly salary totals broken down by pay heads (basic pay, DA, HRA, deductions). This output file is automatically transferred as input to the general ledger system, which posts the amounts to the appropriate expenditure heads. The auditor checks that the total salary figure in the payroll output exactly matches the total debits posted in the general ledger. They also check that when the accounts section exports the trial balance into an Excel spreadsheet to prepare the annual financial statement, no figures are accidentally altered during the copy-paste or reformatting process.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why is the transfer between systems a point of audit risk?▼
What controls should exist at system-to-system transfer points?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.