Some Auditing Aspects of Electronic Data Processing Systems
BY ROLAND E. KING PRINCIPAL, DETROIT OFFICE
Presented before the Saginaw Valley Chapter of the Institute of Internal Auditors--November 1956
I would like to begin this talk with a quotation from the booklet "Data Processing By Electronics," which was published by our Firm a little over a year ago.
"In the electronic data-processing system many of the basic functions in record keeping are handled at electronic speed. In the manipulation function of record keeping all the assembly, sorting, classification, reference, and arithmetic operations are performed automatically within the components of the system, directed by a series of stored instructions called a program. It is mainly the performance
of the manipulation function that sets apart the electronic system as unique, and it is there that the electronic system gains its greatest advantages over others. Storage capacities of the system make possible the retention of data from master files, carry-forward balances, intermediate results, and the like, thus eliminating the need for temporary filing, separate cross references, and other manual handling. Access to stored information, intercommunication within the system, computation, and the making of decisions — all required in the manipulation function--occur at electronic speed. Beyond the preparation of the program and input data, human participation plays only a minor part in supervisory control in the electronics system. Substantially all required supervision is provided for in the program. In addition to the handling of the conventional record-keeping functions, electronic equipment has a far greater potential in alternative uses than is found in other systems. Possessed of the immense advantages of superior capacities and speeds, electronic equipment brings within reach of attainment a higher level of effectiveness in production control,
and other tasks of business management. Superior capacities and speeds not only permit the present job to be done faster; they also make possible the accomplishment of tasks never heretofore attempted