Question

How have electronic data interchange (EDI) systems affected audits?

A) Since orders and billing transactions are done over the computer, source documents cannot be obtained.
B) Auditors often need to plan ahead to capture information about selected transactions over the EDI.
C) There is no audit trail in an EDI system, so controls are typically assessed as weak.
D) Since all transactions occur over the computer, reliability is high and little substantive testing is needed.

Answer 1

EDI systems have altered the audit process by requiring auditors to plan ahead to capture electronic transaction information, thus changing the approach toward gathering and validating audit evidence. Thus, the option B is the correct answer.

Step-by-step explanation:

Electronic Data Interchange (EDI) systems have impacted audits in several ways, but primarily by changing the nature of audit evidence and the way such evidence is collected. Specifically, answer option B) Auditors often need to plan ahead to capture information about selected transactions over the EDI. reflects how EDI systems affect audits. This is because in an EDI environment, audits may need a different approach to capture and validate transaction data since traditional paper trails may not exist. Auditors must employ new techniques and technologies to ensure that they can adequately assess controls and validate transactions, requiring more planning and a potential re-evaluation of audit methods.