1 / 17

Embedded Audit Modules in ERP Systems Implementation and Functionality

Embedded Audit Modules in ERP Systems Implementation and Functionality. Roger Debreceny Glen Gray Joeson Jun-Jin Ng Kevin Siow-Ping Lee Woon-Foong Yau. Presented at the Fifth Continuous Assurance Symposium Rutgers University, November 2002. In this Presentation.

vincent-petty
Download Presentation

Embedded Audit Modules in ERP Systems Implementation and Functionality

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Embedded Audit Modules in ERP SystemsImplementation and Functionality Roger DebrecenyGlen GrayJoeson Jun-Jin NgKevin Siow-Ping LeeWoon-Foong Yau Presented at the Fifth Continuous Assurance SymposiumRutgers University, November 2002

  2. In this Presentation • Background and Research Questions • EAM scenarios • Testing environment • Results • Future research and limitations

  3. ERP Systems • Enterprise Resource Planning Systems are the carrier battle group of the enterpriseinformation systems • Average ERP system costs $11.5mand takes 19 months to implement • Foundation on a single or federatedDBMS

  4. Embedded Audit Modules • “Modules placed at predetermined points to gather information about transactions or events within the system that auditors deem to be material.” Weber (1999) • Implemented in the DBMS environment as triggers or stored procedures • EAMs as compliance-testing or substantive testing tools • Very little evidence of actual usage

  5. Research Questions • What functionality is provided by pre-existing EAMs or other monitoring technology to support appositely designed triggers and stored procedures within ERP systems? • What coverage of transactions is readily provided within the ERP database environment • What are the barriers to adoption of EAMs in the ERP environment?

  6. Methodology • Develop EAM scenarios • Fraud prevention and detection • Develop sample of ERP providers • Medium  large size corporations • Provide scenarios to ERP providers • Code solution • Review in f2f interviews

  7. EAM Scenarios • Nine-step EAM implementation process of Groomer and Murthy (1989) followed • Audit objectives relate to POB’s Forensic Fieldwork Phase • Five test alert scenarios were designed • Red flag • Simulated fraud scenario • Identify triggers or stored procedures • Develop pseudocodes • Pass to ERP supplier for implementation and review

  8. Sampled ERP Suppliers • Frontstep • Scala • Industrial & Financial Solutions-IFS • Intentia • Oracle • SAP

  9. Results-Frontstep • Use Frontstep’s field triggers scripted in PROGRESS • Data from field trigger written to a file • Data analyzed and distributed using SQL & ASP • Also use Cognos’ Decision Stream for data warehouse • Analysis • Limited support • Tough

  10. Results-Scala • Either script in MS VBA or MS Office • Analysis: • No support for EAM • Tough

  11. ResultsIndustrial & Financial Solutions-IFS • IFS uses an object, component approach • EAM can be simulated using combination of Java and SQL • Analysis • Feasible with support for querying, timing and knowledge distribution • Tough

  12. Results-Intentia • Intentia’s Movex ERP product has predefined alerts related to major business cycles • Support for new alerts in script manager • Analysis • Intentia has comprehensive alert system • >100 predefined user-defined alerts • Support for both triggers and stored procedures • Good script manager

  13. Results-Oracle • Provides an Alert Manager • Complete an alert definition form • Alert can include OS command queue or SQL script • Can define actions on alert firing • Analysis • Alert Manager provides most of the required functionality of an EAM

  14. Results-SAP • Require writing of an Advanced Business Application Programming (ABAP) script • Subsequently embedding the script within the database. • Analysis • Require expert knowledge of • ABAP programming • Client’s database structure

  15. Conclusions • Highly variable support for EAMs within surveyed ERP systems • Barriers to adoption • Extensive knowledge set required to program EAM • Barriers to deployment • Lack of demand • Difficulty in defining the conditions for firing EAMs

  16. Future Research Agenda • Relationship of EAMs to wider assurance objectives • More work required on conditions for EAMs • Were scenarios realistic? • Relationship between EAMs and Business Intelligence/Data Warehouse systems? • Demand for EAMs?

  17. Thank You!

More Related