ERP is a tool for an organisation to increase its business efficiency & Auditors for enhancing effectiveness and efficiency of audit. ERP emphasises the focus on process controls, to perform analytical & compliance testing and leverage IT assisted audit steps.
Assuming a situation where a company has implemented an ERP solution, a Chartered Accountant, as an Auditor has a number of attributes which can be leveraged to audit advantage through ERP, and thereby:
• Ensures that the internal controls and checks are consistently maintained
• Ensures that the provisions of Income tax or other fiscal laws are not ignored
• Ensures that the Accounting Standards are consistently followed across the company
• Improves the quality of the reporting
• ERP can automate the process of inventory valuation. It enables loading of all costs on to the closing inventory
• Ensures periodic closure of financial system in ERP environment
• Ensures the system records for audit for an end-to-end analysis of a given transaction
