Audit and Assurance

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IPE testing

  • 1.  IPE testing

    Posted 09 Feb, 2020 08:59
    Hello Folks.

    Could you please help with the following:
    IF there is a reconciliation performed cash to bank by the system: Is it an IPE or an automated control ?

    IPE scenario: The auditors need to make sure the reconciliation cash to bank is complete and accurate
    AC scenario: The auditors need to test for the system automated control is calculating the exceptions correctly.

    For me IPE does not make any sense. For others they say its an IPE because they want to make sure the report is accurate and complete.
    Please advise. What do you think.

    Also what is the procedures in this case if it is an IPE to test for it.

    Thanks

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    Marat Kaisseov
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  • 2.  RE: IPE testing

    Posted 10 Feb, 2020 05:52
    I hope you don't mind me asking.... but what does "IPE" stand for?

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    Sven De Preter

    Sr. Network & Systems Administrator
    Corporate DPO Team Member

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  • 3.  RE: IPE testing

    Posted 10 Feb, 2020 07:34
    IPE is information produced by the entity. In other words, in the reconciliation control example above, if management is producing a report which is the basis of their reconciliation (the report is therefore considered IPE), management must document their procedures to get comfort over the completeness and accuracy of the report so they know that the reconciliation was performed properly.

    Marat, IPE is most often associated with manual review controls, and typically not automated controls. Is the reconciliation performed automatically by the system based on certain threshold configurations, or is management performing a manual control using a cash report that they generate?

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    Raymond Mach
    Sr. IT Audit Manager
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  • 4.  RE: IPE testing

    Posted 11 Feb, 2020 11:59
    Edited by Kalyan Upadhyaya 11 Feb, 2020 13:26
    Without knowing full details of how the control is being performed, my current interpretation is that both scenarios are applicable here. This is an application control that utilizes IPE.

    For testing purpose I would focus more on the application control aspect and not on the IPE. The application control is already comparing two independent source of information. If the IPE is inaccurate or incomplete, it should be identified by the application control.

    However, the testing must validate that the application control would appropriately identify the reconciliation issues for further investigation.

    Hope that helps.


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    Kalyan Upadhyaya
    IT Audit Manager
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  • 5.  RE: IPE testing

    Posted 11 Feb, 2020 13:01
    Hello Marat,

    The auditors want to test financial reporting application control.  I suggest you work with the business process owner, please contact the Controller or Department head and have them demonstrate process and capture some key screen prints that illustrate process and exception reports.


    Thanks.
    Sal

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    Sal Rodriguez
    Director of Internal Audit
    CISA, CIA, CRMA, CCSA, CGAP, CICA, MBA, MS
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