The Impact of Emerging Information Technology on Auditing

The impact of emerging information technology on auditing

Zabihollah Rezaee Middle Tennessee State University, Murfreesboro, Tennessee, USA Alan Reinstein School of Business Administration, Wayne State University, Detroit, Michigan, USA

As businesses increasingly use electronic data processing (EDP) techniques to process their accounting systems, auditors must gather critical information more efficiently. Such tools and techniques as electronic data interchange, the Internet and other modern technological subjects signal the end of the traditional audit. Technology has made inputting information for transactions and events more simple – and evaluating the related controls and results more critical. Accumulating sufficient evidence needed to construct an informed decision means understanding where to look for that evidence, what control procedures to consider and how to evaluate those procedures. The purpose of this article is to draw attention to these issues and the recently issued SAS No. 80, which offers auditors guidance to accumulate sufficient evidence to audit their computerized clients. We also address some issues auditors may face in evaluating the security control in their clients’ businesses.

Ever-increasing information technology and organizational computer use require auditors to obtain evidence electronically and, thus, encourage the profession to incorporate the concept of electronic evidence into its professional standards. The American Institute of Certified Public Accountants (AICPA)’s Auditing Standards Board recently issued Statement on Auditing Standards (SAS) No. 80, Amendment to SAS No. 31, Evidential Matter, and concurrently publish an Auditing Procedures Study (APS), The Information Technology Age: Evidential Matter to provide auditors non-authoritarian guidance to SAS No. 80’s provisions. The AICPA’s computer auditing subcommittee (CAS) also discussed 11 key information technology issues for auditors to consider when planning financial...