IBM 32-0753 In-Line Electronic Accounting Internal Control and Audit Trail free download

File name 32-0753_In-Line_Electronic_Accounting_Internal_Control_and_Audit_Trail.pdf

In-Line Electronic Accounting, Internal Control and Audit Trail by Price Waterhouse & Co., New York, N. Y Current interest in the area of in-line accounting on elec- tronic accounting systems has focused attention on the responsibility of the controller and the auditor in the planning of such installations. We therefore asked the accounting firm of Price Waterhouse & Co. to survey the aspects of internal control and audit trail encountered in early installations of the IBM 305 RAMAC and similar aspects which it is anticipated will arise in the future. The results of this survey are contained in this booklet which should assist in the installation and operation of in-line electronic accounting systems. International Business Machines Corporation Introduction data, the system is able to process as an uninterrupted operation substantially all the accounting for a business The increasing importance and use of electronic data transaction. As an example, in processing an order processing systems in business have made essential the from a customer, the system could relieve the inventory design of new techniques of control. The ability of large accounts (stored in memory) of the amount of ship- and medium scale electronic data processing systems to ment, compute and print the invoice (using sales prices . perform, at high speeds and with great accuracy, complex stored in memory), charge the customer's account manipulation of data recorded on magnetic tape or other (stored in memory) and accumulate the pertinent cost media has been demonstrated. The problems they pose and sales data (likewise stored in memory). The only to controllers and auditors have been recognized and visual record that need be produced would be an in- reported in various publications. Solutions designed to voice to be sent to the customer. solve the problems of internal control and audit trail for Although it is not unusual in highly mechanized ac- these systems have been, and are being, tested by actual counting systems to find these operations performed operations. automatically, it is only in electronic accounting sys- It might appear on initial consideration that these solu- tems with large internal data storage that this concen- tions would almost automatically be applicable to all tration or consolidation of operations appears. Trans- electronic data processing systems. However, this is not actions are processed through a series of uninterrupted the case. Certain electronic accounting systems are now operations which directly alter permanent historical available t