Auditing and EDP
by VITO G. PETRUZZELLI Consultant, Management Advisory Services, Chicago Office
Presented before the Kansas City Chapter of The Institute of Internal Auditors—January 1966
To BEGIN PROPERLY, I should like to take a moment to express my gratitude to the Chapter Members, especially Mr. Albert Powell, for inviting me to speak to you this evening. He was kind enough to send your Chapter's membership roster to me. It was impressive. As practitioners,
most of you, no doubt, have had direct interest and experience in our subject. Certainly several of you are qualified to speak before a group such as this and relate some rather sophisticated auditing techniques
of using a computer. Although a discussion devoted exclusively to the use of computers in specific audits would be an interesting presentation,
the subject is far too important to be accorded such limited treatment.
Our treatment of the subject will be divided into two parts. The first will be a review of internal control in EDP systems—an essential auditing function. Our firm has given considerable attention to principles
of internal control in EDP systems and we have an approach to the review of EDP controls that represents the distillation of many fine ideas, much hard work, and the lessons drawn from a great deal of practical application.
The second will be a discussion of computer audits and will be directed to those of you who are anxious to escape the drudgery of extending
detail, footing columns, and examining transactions. We shall mention some specific examples of what our firm has done in this type of audit. Each example will represent a specific client, with a specific computer system and specific computer applications—facts important to keep in mind as we go along.
Some of you may ask, "Since I am not an EDP user, why is tonight's
subject important for me?" Briefly, there are three good reasons.
First, we have an interest as customers of industries that use EDP, such as the public utilities industry.
Second, we cannot escape exposure to the growth of information technology, which has been spectacular. It has developed from a stream of unrelated jobs, such as billing and payroll, to a Niagara of total systems
operating in real-time. At one time or another, most trade and professional publications, newspapers, and periodicals have carried