Summary
Electronic data interchange - Includes related article on risk
Electronic data interchange (EDI) is an important communication tool that also presents many challenges to internal auditors. The reduction of paper work and paper audit trails that results from the use of EDI can serve as a nuisance to auditors because internal controls that worked in the past may no longer be as effective. As a solution, auditors should perform risk assessment and internal control evaluation during planning, implementation and operations of EDI systems. Risks that should be monitored are the possibility of an unauthorized intruder accessing information, data integrity loss, absence of transaction completeness, EDI system lack of availability, failure to transmit transactions and lack of legal guidance. The risk assessment process involves the computation of the monetary significance of the risk, assessment of the probability that the risk will happen, and reduction of the impact of the risk.See the full content of this document
Extract
EDI risk assessment.
The inherent risks in EDI must be met by internal controls that will preserve the authenticity, integrity, confidentiality, and availability of information.
In a competitive business environment, the success of an organization depends on its timely communication with vendors, customers, suppliers, and other external entities. Electronic data interchange (EDI), which enables business to create documents within minutes and transmit them within seconds, is giving many organizations a vital communications edge. EDI is an on-line transaction system that facilitates computer-to-computer communication of standardized business documents and transactions across organizational boundaries. Computers, databases, and information centers of trading partners are linked via public or other communication networks. EDI is also ...See the full content of this document
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