COMPUTERIZED
AUDIT SYSTEM: ISSUES, PROBLEMS AND PROSPECTS
(A
CASE STUDY OF AKINTOLA WILLIAMS DELOITTE, ABUJA)
TABLE
OF CONTENTS
Title
page i
Declaration ii
Certification iii
Dedication
iv
Acknowledgement v
Abstract vii
Table
of contents viii
Chapter One
Introduction
1.1
Background of the
study 1
1.2
Statement of the
Problem 4
1.3
Hypothesis 4
1.4
Objective of the
study 5
1.5
Scope of the study 6
1.6
Significance of the
study 6
1.7
Delimitations 7
1.8
Definition of Terms 8
Chapter Two
Literature
Review
2.1
Introduction 11
2.1.1 Application
programs 14
2.1.2 Utility
program 15
2.1.3 Auditor
Developed programs 15
2.1.4 Auditing
around the computer 16
2.2
Impact of computer
audit on auditors 18
2.3
Control over
computer use 19
2.4
Computer application
and tasks for audit 20
2.5
Issues involved in
computer audit 23
2.6
Implication of the
auditor 28
2.7
Sample computer
audit procedure 29
2.8
Risks associated
with computer 30
Chapter Three
Research
Methodology
3.1
Methods of data
collection 35
3.2
Data analysis
techniques 36
3.3
Research Assumptions 39
Chapter Four
Data Analysis
and Presentation
4.1
Data analysis 40
4.2
Schedule for testing
of hull hypothesis 56
4.3
Contingency table
for testing null hypothesis 58
4.4
Decision rule 60
Chapter Five
Summary,
Conclusion and Recommendation
5.1
Summary 62
5.2
Conclusion 64
5.3
Recommendations 65
Reference 67
Appendix 69
CHAPTER
ONE
INTRODUCTION
1.1
BACKGROUND
OF THE STUDY
Computerized Auditing System: A computer is an
electronic device, which works faster than the ordinary human brain. Although a
computer has no brain of its own to reason like a human being, it has in-built
memories that enable it perform complex mathematical problems as fast as
possible, faster than the human brain. The background of computing aids can be
traced to China
where merchants first made use of ABACUS, while the history of modern day
computers is traced to French where Pascal in 1642 invented the First Machine
for doing the four fundamental operations of arithmetic in money. This was
improved upon by Hervrith in 1671 and recommended for use in the large volume
of astronomical calculations required at that time. The first analoque computer
was derived from Kelvin Tidal analysis for producing tides.
Since the first office computer LED Ilyans end
co-electronic Office was introduced in 1953, machine have increased on speed,
reliability and new used in wide range of application without any change in the
fundamental principles. The introduction of computer has made accounting such
as auditing easier and quicker to perform. The computer is capable of
performing a months transaction of auditing work of an organization in a few
hours thus reducing the job of the Auditor.
This auditor need to learn about computer
programming or at least should be able to follow the transaction trail up to
the paint where they are keyed into the computer in form of input since there
is usually a Loss of Visible Evidence (LOVE) during operation. The Auditor
should be able to relate the input to output. It is also advisable for an
Auditor to take a course in computer programming in output data in course of
his audit trail.
The fast developing of technology, paper
transactions are fast disappearing, consequently, source documents are less
available. The introduction and adoption of computer to the Auditor business
has led to revolution in data processing methods. They have served as a
catalyst to auditing world in the area of efficient, effectiveness, timely and
accurate operation of business.
From the foregoing, computerized audit as a way
of checking the efficiency and accuracy of data procedures present a
fascinating study.
An audit is an independent or objective
examination of the financial statement of an entity and the expression of an
opinion. It could be inferred that the primary reason of conducting an audit is
to enable the Auditor make a report to the effect that the financial statement
as prepared by officers of an establishment gives a true and fair view,
otherwise to what extent they disagree with the report.
The auditor along side help to ascertain compliance
of the organization to operational policies and prescribed standard. This is
aimed at increasing the acceptability, dependability and usefulness of
financial statement.
1.2
STATEMENT
OF THE PROBLEM
The research will be concerned with the problems
faced by auditors and will offer solution to them. Those problems are:
a.
Complexity of the
computer systems
b.
Non-existence of
visible evidence
c.
Possibility of
systematic errors
d.
Non retention of
files and data
e.
Lack of audit trail.
The tracing of individual transaction through the system from source to
completion.
1.3
HYPOTHESIS
Hi: A
computerized accounting has a significant influence on the auditor
Ho: A computerized accounting system has no
significant influence on the auditor.
RESEARCH
QUESTION
In line with the above purpose of the study some
questions are design to enable the research address the issue. These questions
are:
a)
What are the causes
of the problem in computerized system of auditing?
b)
How will the auditor
carry out his auditing functions in a computerized system?
c)
What are the impacts
of computerized system and the Auditor function
d)
Is there any need
for Auditors in a computerized system
e)
Would it be easy for
Auditors to detect computer fraud using computerized system?
f)
How would the
computer system influence opinion of Auditors?
g)
Are Auditors
function affected by the use of computers?
1.4
OBJECTIVE
OF THE STUDY
The purpose of the research is as follows:
a)
To examine the
advantages of audit
b)
To examine the
computer audit
c)
To examine the
responsibilities of Auditors in a computerized environment.
d)
To access the
computerized procedure in Akintola Williams Deloitte and see how they combat
fraud and errors.
1.5
SCOPE
OF THE STUDY
This research work is conducted with computerized
audit approach as it is obtained at Akintola Williams Deloitte. It also
emphasizes on the assessment of computerized procedure in achieving
effectiveness and efficiency in audit operations. Included is the analysis of
the problems associated with the new computerized system of auditing firms in
relation to its effects in the operation of the firms.
1.6
SIGNIFICANCE
OF THE STUDY
The significance of the study is derived from the
impact of computerized auditing system and also the value ascribed to it by the
society.
The study has a significant impact on auditors.
Impact
on Auditors
It will consider computerized auditing system,
records auditing system, records and accurate way of applying computer in
keeping records in Akintola Williams Deloitte Abuja.
The decision makers will also immensely from the
appropriate information would be available for decision making and planning.
The researcher will also find the significance of
the project in their quest for knowledge and also as a useful contribution to
their field of study.
1.7 DELIMITATIONS
In the past, auditing of public and private
organization have been carried out by the conversational method making it time
consuming and problems encountered led to the development of computerized
audit, thus helping to overcome the shortcomings of the conventional method.
The computerized auditing system however, created its own problems which
hinders the Auditor from discharging his responsibilities. The research will
try to address these problems. The research may not provide absolute solution
for these problems but will try to reduce some likely errors which may be
created or affect the Auditor during audit work in a computerized environment.
The delimiting factors affecting the full
coverage of this are:
a)
Data collection for
research is not easy
b)
Other problems
include financial handicap because research work demand more funds than one
could afford.
c)
Lack of relevant
books on the topic and other periodical materials.
d)
Time constraint
Nevertheless, much will be done
on the work despite these constraints.
1.8 DEFINITION OF TERMS
To accomplish the objective and aim of this work,
it is therefore necessary th