Instruction Manual: For Hands On Training On Business Application Software Audit

Instruction Manual
For hands on training on Business Application Software

Audit.
Contents
Introduction ............................................................................................................................................ 3
Resources needed with each DISA participant: ...................................................................................... 3
Learning Objectives from the HANDS ON TRAINING. The objectives are listed below: ......................... 4
Overview of the steps to HANDS ON TRAINING: .................................................................................... 5
Phase I: ................................................................................................................................................ 5
Phase II: ............................................................................................................................................... 5
Phase III: .............................................................................................................................................. 5
Phase IV: Hands on Training ............................................................................................................... 5
Part A: Business Application Software: Assurance analysis ............................................................ 6
Part B: Business Application Software: Compliance Analysis ......................................................... 6
Part C: Business Application Software: Users Rights Analysis ........................................................ 7
STEPS TO DO ........................................................................................................................................... 7
Page | 2
Case for hands on Training:
Introduction
The case is part of HANDS ON TRAINING being enabled to DISA participants.

The Task Statements and Knowledge Statements as listed below shall act as a
guide to draw down the objectives.
Task Statement
7.15 Audit specific application software users; assess business system

functionality, user rights and segregation of duties levels of authorization, and
data security by performing analytical procedures review, compliance testing
and substantive testing.
About Us
Knowledge Statement
7.16 Application controls review as relevant for assurance or compliance

assignments.
7.17 Report findings in specific format using standards/best practices as

required.
Resources needed with each DISA participant:
1. TALLY ERP 9 Release 4.8 and upward.
2. MS excel
3. IDEA Audit Tool
4. Net connectivity, desired.
Page | 3
Learning Objectives from the HANDS ON TRAINING. The objectives are
listed below:
1. To help member understand functionalities business application software

and map the same to business needs.
The question to get answer to is:
Whether the business application software being used is as per the needs of
business?
2. To guide members on process if evaluation of control structures as build in

business application software.
Whether the business application software has the necessary controls put in
place to achieve business objectives?
3. To demonstrate the way and method to perform the compliance testing for
control risk assessment.
Whether controls are performing as per expectation?
4. To guide members to use of CAATs for performing a business application

software audit. CAATs may be embedded in software, general purpose
software or a specific application written.
5. To guide members to generate data/information through use of CAATs and

validate the MIS submitted to them.
6. To help members assess the risk while placing reliance on information /

report generated through business application software.
7. To understand how statutory audit requirements can be generated through

system.
Page | 4
Overview of the steps to HANDS ON TRAINING:
Phase I:
Demonstration of CAAT tools. This will cover tools embedded in business

application software, MS Excel and generalised audit software.
Phase II:
Introduction of the software on which participants shall perform their exercise.
TALLY has been used as demonstration software. The whole exercise is

oriented to help members learn the process of performing a business
application software audit. Use of specific software does not limit the same,
but helps a larger member base to learn as the usage data base of selected
software is large.
Phase III:
Introduction of the company/entity on whose data the training shall be done.
A separate write-up enclosed.
Phase IV: Hands on Training
Members are expected to come with the following solutions on the given
company data.
Part A: Business Application Software: Assurance Analysis
Part B: Business Application Software: Compliance Analysis
Part C: Business Application Software: User Rights Analysis
Part D: Open house: Members from their own knowledge can bring something
unique from the data submitted.
Part E: Preparation of a SYSTEM AUDIT REPORT based on above findings.
Page | 5
Part A: Business Application Software: Assurance analysis
1. Prepare a paragraph for business need for the company.
2. Prepare a list of ten controls that they feel need to present in business
application software to suit the business needs.
3. Prepare a checklist to validate their list of ten controls, with the following
questions in mind.
a. Whether the controls put in place suit the business needs?
b. In case, the answer to above question is NO, then write the nature of
shortcoming.
c. Whether the controls are working effectively? List the steps adopted to
validate the said controls.
d. In case the answer to above is NO, list the following for each such control.
- Risk
- Impact
Part B: Business Application Software: Compliance Analysis
a. Make a list of laws applicable to entity, and also the laws for which data shall
be available from the business application software.
b. Whether data generated from system is accurate and correctly reflects the
compliances?
c. If the answer to above is NO, what are the shortcomings need to be listed
and their impact on business to be mentioned.
Page | 6
Part C: Business Application Software: Users Rights Analysis
List of users along with their job profile enclosed with the company write-up.
1. Whether the user rights in TALLY,
STEPS TO DO
Step 1: TALLY data already made available. All participants expected to install
on their LAPTOPs.
Wh
ICAI Computer Solutions Pvt Ltd. established in 2012 is an emerging computer

hardware trading company offering a one-stop shop for traders looking for the
ultimate trading system. The company specializes in super low prices, unique
payment plans and extra-long product warranties.
Our Mission
We aim to build custom trading computers and complete trading system

setups for forex traders, stock traders, futures traders, day traders, private
equity funds, as well as hedge funds.
Company Profile
Name ICAI Computer Solutions Pvt Ltd.
Year of Establishment 2012
Business Type Trading Company
Page | 7
Registered Office Situated at Indore, M.P.
Promoters Mr Ravi Manik &Mr Nikhil Gupta
Products
Our company specializes in exceptional quality Computer Accessories. Our

premium Computer Accessories range includes
 Monitor
 Mother board
 Hard disk
 CPU
 Printer
 Woofer
 Keyboard
 Mouse
Page | 8
Significant Accounting Policies adopted in preparation of Financial Statements:
1. Basis of preparation of financial statements

Mercantile method of accounting is adopted in preparation of financial
statements.
2. Use of estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities.
3. Fixed Assets
Fixed Assets are accounted at cost of acquisition inclusive of freight,
inward duties, taxes and other incidental expenses incurred for bringing
asset to working condition.
4. Inventories
Inventories are valued at cost or Net realisable value whichever is lower.
5. Depreciation
The company has provided for depreciation at the rates specified in
Schedule XIV to the Companies Act, 1956.
6. Related Party Transactions

 In December 2012 Company had given loan to Mr Ravi Manik.
 In March 2013 Company took loan from Mr Nikhil Gupta.
7. Statutory Compliance
 TDS on Rent and Professional Services has been deducted and
paid.
 VAT applicable on Mother Board has been charged in invoices and
input VAT credit is availed on same product.
Page | 9

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Instruction Manual

For hands on training on Business Application Software

The case is part of HANDS ON TRAINING being enabled to DISA participants.

7.15 Audit specific application software users; assess business system

7.16 Application controls review as relevant for assurance or compliance

7.17 Report findings in specific format using standards/best practices as

Resources needed with each DISA participant:

1. TALLY ERP 9 Release 4.8 and upward.

3. IDEA Audit Tool

4. Net connectivity, desired.

1. To help member understand functionalities business application software

The question to get answer to is:

2. To guide members on process if evaluation of control structures as build in

The question to get answer to is:

The question to get answer to is:

Whether controls are performing as per expectation?

4. To guide members to use of CAATs for performing a business application

5. To guide members to generate data/information through use of CAATs and

6. To help members assess the risk while placing reliance on information /

7. To understand how statutory audit requirements can be generated through

Demonstration of CAAT tools. This will cover tools embedded in business

Introduction of the software on which participants shall perform their exercise.

TALLY has been used as demonstration software. The whole exercise is

Introduction of the company/entity on whose data the training shall be done.

A separate write-up enclosed.

Phase IV: Hands on Training

Part A: Business Application Software: Assurance Analysis

Part B: Business Application Software: Compliance Analysis

Part C: Business Application Software: User Rights Analysis

Part E: Preparation of a SYSTEM AUDIT REPORT based on above findings.

1. Prepare a paragraph for business need for the company.

a. Whether the controls put in place suit the business needs?

Part B: Business Application Software: Compliance Analysis

1. Whether the user rights in TALLY,

ICAI Computer Solutions Pvt Ltd. established in 2012 is an emerging computer

We aim to build custom trading computers and complete trading system

Name ICAI Computer Solutions Pvt Ltd.

Year of Establishment 2012

Business Type Trading Company

Promoters Mr Ravi Manik &Mr Nikhil Gupta

Our company specializes in exceptional quality Computer Accessories. Our

1. Basis of preparation of financial statements

6. Related Party Transactions

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