THE INTERNAL AUDITOR'S ROLE by Donald L. Morchower IN DEVELOPING EDP SYSTEMS Director, New York Office
Presented before the
Wall Street Association
of Internal Auditors-June 1972
My thoughts on the role of the internal auditor in development of electronic data-processing systems may not be unique or profound, but my experience indicates that many internal auditors are not involved during this phase of EDP systems, when such involvement should begin. It appears to me fundamental to the discharge of internal audit responsibilities to review new computer systems before implementation to make sure that proper management and financial controls and audit trails are incorporated. Yet experience indicates that this responsibility is often overlooked. One positive sign that this situation might be changing is that I have been asked to discuss this subject five or six times over the past few years with groups of internal auditors, so possibly the internal auditor is beginning to realize the importance of determining and undertaking his proper role in this very important activity.
Many of us are aware of problems blamed on or in some way related to computers over the past several years. Of course, systems are designed and programmed by people, and people must interface with computer systems by providing and entering proper input and by understanding and using the output. Yet, it is fairly common to read a newspaper article with the headline "Computer Failure" printed in bold type, wherein the reporter does not really understand the problem or its cause. Even minor problems when handled in a heavy-handed and impersonal manner can cause major difficulties
in an age of consumerism.
Computer systems do not have to be designed or implemented illogically or with errors, nor do they have to be used with insensitivity to people. A customer lost because of repeated incorrect billings and frustrated attempts to resolve the problem is much more difficult to recapture than he was to acquire in the first place. Similarly, it is more difficult to deal with an