Parreñas, Aira Ruth R.

2018-07243

PSA 500 in Information Systems Auditing

Information systems is a system that composes of several processes. This includes

data collection, data processing and distribution of processed data to intended users.
Information systems has marked its importance in accounting due to the fast paced
environment people are living in. It is no longer efficient to use paper documents and it seems
pre-historic to manually journalize all the transactions that occurred in an entity.
One of the many areas that information systems can be useful is in the area of
auditing. This area of accounting involves gathering evidence and using it to form an opinion
whether the financial statements are stated fairly to intended users. Philippine Standard on
Auditing is one of the many standards that guides accountants on how to fulfill their duties.
They can be applied in the Information Systems Auditing as well, given the close nature of
the procedures in both areas of knowledge. This paper will be tackling one particular standard
which is PSA 500: Audit Evidence.
The scope of PSA 500 composes the definition on audit evidence as well as the
application of the latter in forming a conclusion. It also discusses the auditor’s responsibility
in gathering the evidence appropriately. Stated in PSA 500, the objective of the auditor is to
“design and perform audit procedures in such a way as to enable the auditor to obtain
sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to
base the auditor’s opinion.”
The standard also discusses several definitions that involve audit evidence. Some of
the terms defined are: (1)accounting records or simply the entries, supporting calculations,
disclosures, etc. that may be electronic or paper; (2) audit evidence which is the information
collected by an auditor to create an opinion; (3)Appropriateness or the quality of the
information; and (4) Sufficiency or the quantity of the information.
PSA 500 also discusses the requirements of audit evidence. It should be secured that
the evidence gathered should be both appropriate and sufficient. The data received should be
properly evaluated on its reliance as well before using it in the formation of the opinion. It is
also advised that data should not only be taken from one source in order to test for any
inconsistency. When two sources conflict with the data given, auditors are required to
perform audit procedures to resolve the given matter.
Application of the said standard explains that audit evidence is cumulative and
therefore obtained by series of audit procedures to strengthen the opinion of the auditor. This
may include observation, inquiry, inspection, recalculation, reperformance, confirmation and
analytic procedures. All of these are required in order to get appropriate and sufficient
evidence. This will also apply to the reliability and relevance of the information received
which will play a big role in forming the opinion.
In connection to Information Systems Auditing, the PSA 500 is no doubt applicable
to this area of accounting. The process is the same as in traditional audit but with the help of
technology.Evaluation will be assisted by the accountants but it will be much easier since
most of the information are in the computers to be stored and evaluated initially. Computer
programs might not be as accurate as accountants but they can also sense inconsistencies in
the data given from different sources. The process is still the same in PSA 500 but there is of
course less effort when it comes to data gathering and safe keeping.
Overall, Philippines has been developing in many areas. It has come far with its
accounting information system and it is no longer a surprise that the age of technology has
merged with accounting. It won’t be long that this country will be advance in this area.

Sources:
Audit: What It Means in Finance and Accounting, 3 Main Types. (2022, May 2).

Investopedia. Retrieved September 17, 2022, from

https://www.investopedia.com/terms/a/audit.asp
Parreñas, Aira Ruth R.
2018-07243

Philippine Standard on Auditing 500 (Redrafted). (n.d.). ww.aasc.org.ph. Retrieved

September 17, 2022, from

https://www.aasc.org.ph/downloads/psa/publications/PDFs/PSA-500-Redrafted.pdf