Design And Implementation Of A Computerized Auditing System For A Financial Institution

Project and Seminar Material for Computer Science and Computer Engineering

Design And Implementation Of A Computerized Auditing System For A Financial Institution


Abstract


The documentation management system in most audit firms no doubt, has a difficult task in today’s competitive auditing industry; hence there is the need for a fat, more efficient and effective processing system.

Client’s files cannot be assessed quickly, and many difficulties are experienced in the updating, verifying and other auditing jobs.

The work is geared towards the computerization of the existing system of processing data as well as identifying the various problems which are encountered the manual and mechanical method of data processing in the auditing of a clients financial statement of account and to recommend a first class solution to these problems which is to computerize the auditing/ processes in the banking sector,

The thesis as well compares the existing system, with the new system, which is the accurate and a faster means of processing data and the problems faced in preparing a customers financial statement of account. This alternative will provide a clear and urgent answer to the problems encountered in the auditing operations and hence fill private and government organization, industries, banks etc with reliable alterative functions assurance and dependability of financial statement about the account of the bank.

The justification of this lies on the use of manual auditing operation. Finally, the thesis was concluded with the implementation programming, text run and changeover process of the new system.


Organization of the Study


This study only focused on the computerization of the existing system of processing data as well as well as identifying the various problems, which are encountered in the manual mechanical method of data processing in auditing a client’s statement of account.

  1. Chapter 1 comes the introduction statement of the problem, purpose of study, aims and objectives, limitations, assumption and definition of terms.
  2. Chapter 2 deals with the literature review.
  3. Chapter 3 Analysis of the exiting system, fact finding method, organizational structure, objective of the existing system, input process, output analysis, information flow diagram, problems of the existing system and justification of the new system.
  4. Chapter 4 covers the specification design, input specification and design, file design, procedure chart and system requirement.
  5. Chapter 5, which is the implementation, comprises of program design program flowchart, pseudocode, source program and test run.
  6. Chapter 6 covers the documentation,.
  7. Chapter 7 covers the recommendation conclusion and references.

Table of Contents


  • Title page
  • Organization of the work
  • Table of figure
  • Table of contents

Chapter One

Introduction

  • 1.1 Purpose of study
  • 1.2 Aims and objectives
  • 1.3 Scope of study
  • 1.4 Limitations
  • 1.5 Assumptions
  • 1.6 Definition of terms

Chapter Two

Literature

  • 2.1 Introduction
  • 2.2 The audit process
  • 2.3 Audit operations

Chapter Three

Analysis of the Exist System

  • 3.1 Fact finding methods
  • 3.2 Procedure for data collection
  • 3.3 Organizational structure
  • 3.4 Objective of the existing system
  • 3.5 Input process
  • 3.6 Output analysis
  • 3.7 Information flow diagram
  • 3.8 Problems of the existing system
  • 3.9 Justification for the new system

Chapter Four

Design of the New System

  • 4.1 Output specification and design
  • 4.2 Input specification and design
  • 4.3 File design
  • 4.4 Procedure flowchart
  • 4.5 System flowchart
  • 4.6 System requirements

Chapter Five

Implementation

  • 5.1 Program design
  • 5.2 Program flowchart
  • 5.3 pseudocodes
  • 5.4 Sources program
  • 5.5 Text run

Chapter Six

6.0 Documentation


Chapter Seven

Recommendation and Conclusion

  • 7.1 Recommendation
  • 7.2 Conclusion
  • References
  • Appendices
  • Table of figure
  • Organizational structure
  • Input format
  • Output format
  • Procedure chart
  • System flowchart
  • Program flowchart

Chapter One


Introduction

Auditing is an activity or exercise that implies an incept examination of a set of financial statements, so as to form an objective opinion which is expressed in the form of an audit report the financial statement about the transaction of a business organization.

Prior to the introduction of computers, auditing was done expansion in business and organization; it became increasingly difficult and cumbersome to accelerate auditing processing. Files and documents containing information about the business or organization being auditing increased in a number and also was hard to keep as they occupy space. Auditor suffered tremendously because of this.

This came with the intervention of computers, widely used today n all areas of human and be it in production, manufacturing, finance purchasing, and auditing resources among others.

The incessant increase in the use of computer in the public and private sector of the world economics is a clear manifestation of the efficiency of the operations in achieving results.

However, the ways of auditing manually in recent times has been confronted with the problems of error traceable to human mistakes and share comings thus overcoming these problems with computer is what the researcher is going to consider in this research work.


1.1 Purpose of Study

The researcher deemed it necessary to carryout this work so as to point out those areas that are associated with manual auditing and also it creates measure to take in other to alleviate the problems.

This work or study will be vital in various ways to a number of people including the businessmen, firms, organization, companies in the filed of auditing. This will be of immeasurable benefit to auditors from times to time.


1.2 Aims and Objectives

In order to keep auditing a breast of unreliable records, then there should be the thirst for reliability and credibility of information and records that facilitate capital business operations, firms and organizations proceed to establish and implement computerized measure and alternative to the present auditing.

The aims and objectives that are involved in investigating on the alternative to manual auditing operations are to provide for security against dubious minded managers as well faulty and unreliable records.

This work will as well serve as a stepping-stone to other researchers in the area of auditing and thus it will help to improve on this work, so that greater findings and recommendations will be made under auditing.


1.3 The Scope of the Work

This research only considers how problems of auditing manually in the area of financial organization be it private or government owned could be extremely reduced or alleviated.

The researcher will look at the existing nature of the problems and then suggest ways to enhance them.

I will equally look at some manual auditing processes but may not go further to expose some auditing problems because of certain circumstance


1.4 Limitations

This project (study) was seriously faced with a number of factors the most important of which were time, money and fact-findings.

Time

Time was by far the most important hindbrain to this since the researcher was tied down to serious studies for her examinations, this research work was shot given the appropriate attention through I made sure that the little I had was used to provide enough facts and figures that will stand as a starting point for other researchers in an auditing related problems. So far the assertion that time was gold, seems to have students work their projects in contemplation.

Money

Limited fund also pose a problem to the realization and completion of this work going to libraries for days and the bank which I used as my case study to interview some staff in the bank typesetting and binding the findings into booklet all these demanded a lot of money.

Fact Finding

Owing to the buy schedule of the bank, getting he fact was not so easy, as most of the staff are very busy.


1.5 Assumptions:

In the research work, I assume the facts and figures gathered are both accurate and reliable and at the end of the study, I would be able to report in this work, the various processes involved in a financial audit operations.


1.6 Definition of Terms Computer System

A device or system that is capable of accepting data using data to carryout sequence of operations in a distinctly and explicit defined manner. The operations and frequently numerical computer data manipulations but also include inputs input output.

Program Flowchart

This is a diagrammatic representation of a computer program.

Amount Generated:

This is the amount of money due to the bank for an auditing job.

Expenses:
It is the expenses made on a project transaction.
Amount Receivable:

It is the amount which the bank receives when the expenses is deducted from the amount generated.

Amount Payable:

This covers the money, which the bank spent on a transaction.


Chapter Seven


Recommendation and Conclusion.

7.1 Recommendation

The basic importance of software testing and its implications with respect to software quality cannot be over emphasized. To develop a software system, it involves a series of production activities where chances of injection of human fallibilities are enormous. If necessary precautions, bearing in mind the necessary preventive techniques/measures, are put in place during and after design and implementation of the computerized alternative, then the problems which are associated with financial auditing manually would be alleviated .

Infact, this project though very challenging, has been a very interesting medium of learning new things and programming techniques.

I am of the opinion that this topic should be given to as many candidates as are desirous to work upon it and come up with different ideas as it affects financial audit.

I would therefore be extremely happy to see this work being used or serving as a prototype to others who would like to improve on it.


7.2 Conclusions

Having identified the numerous problem associated with the current system whereby the financial audit process is done manually is being.

  1. Time consuming
  2. Exposes the organization to greater risk of being duped by some dubious minded managers.
  3. Inefficiency
  4. Unreliable
  5. So rigid, and makes no room for innovative changes.

It is therefore the intention of this project work, to eliminate all these shortcoming as used above. Its major objectives is to provide management with an automated financial information system with the minimum time lag,.
Since financial condition is often considered the best single measure of an organization’s competitive position and overall attractiveness to investors.

An organization’s liquidity, leverage, work capital profitability’s asset utilization, cash flow and equality position can eliminate some of the strategies, as feasible alternatives.

Financial factors very often result in implementation plans being changed. To provide the management with their financial standing in the appropriate policies to move the business forward more than the past years.

This new system also reduces complexities and is very simply to manipulate, very flexible and facilitates changes. Maintenance cost, is projected to the dearest minimum.

It is worth mentioning at this junction, that the system when installed is relative with the old system as it eliminated all the handicaps inherent in the old system with newer and better facilities introduced.


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