Definition
A hash total is a method used primarily by auditors in computer applications to verify the integrity and completeness of data. It involves the summation of certain numbers that, by themselves, bear no practical or functional meaning but serve solely as a control measure. This technique helps to identify whether a record has been lost, omitted, or erroneously processed.
For instance, auditors might sum a set of transaction identifiers, such as check numbers or account numbers, to create a hash total. If the computed total of these identifiers during a particular process does not match the expected hash total, it signals a discrepancy, prompting further investigation to locate and correct the error.
Examples
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Check Numbers Verification:
- Suppose a company processes 100 checks, each with a unique check number. The auditors sum all the check numbers to create a hash total. If the total of the processed check numbers does not align with the hash total, an investigation is warranted to uncover any lost or omitted checks.
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Invoice Numbers:
- In auditing the accounts payable system, auditors may create a hash total of all processed invoice numbers in a batch. Any mismatch indicates that one or more invoices may not have been processed correctly or might be missing.
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Batch Processing:
- When processing a batch of transactions, the sum of unique transaction IDs can be used as a hash total. An inconsistency in this sum alerts auditors to potential data integrity issues.
Frequently Asked Questions (FAQs)
What is the main purpose of a hash total in auditing?
The main purpose is to detect discrepancies, such as lost or omitted records, during data processing. It ensures that all transactions are accounted for accurately.
Why do auditors use hash totals?
Auditors use hash totals as an additional control measure to verify that data has been processed correctly and completely. It helps in maintaining data integrity.
How is a hash total different from a checksum?
A checksum is typically used to detect errors in data transmission, while a hash total is used primarily in auditing to verify the completeness and accuracy of data.
Can hash totals be used for financial control?
Yes, hash totals can be employed in financial control to ensure that all financial transactions, such as invoices and check numbers, are correctly recorded and processed.
Do hash totals have any practical meaning by themselves?
No, hash totals do not have any practical meaning by themselves. They are used purely as a control measure to detect discrepancies in data processing.
Related Terms and Definitions
- Checksum: A value calculated from data to check for errors in data transmission.
- Control Total: Similar to a hash total, but the values summed have a practical meaning, such as adding up the total sales amounts.
- Audit Trail: A detailed record of transactions that allows an auditor to trace financial data from the general ledger to the source document.
- Data Integrity: The accuracy and consistency of stored data.
Online Resources
Suggested Books for Further Studies
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“Auditing and Assurance Services” by Alvin A. Arens, Randal J. Elder, and Mark S. Beasley
- An extensive guide on auditing practices and assurance services.
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“Information Technology Control and Audit” by Sandra Senft and Frederick Gallegos
- A comprehensive book on IT control and audit methodologies.
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“Auditing: A Risk-Based Approach to Conducting a Quality Audit” by Karla M. Johnstone and Audrey A. Gramling
- Focuses on the risk-based approach to auditing and ensuring quality in audit processes.
Fundamentals of Hash Total: Auditing Basics Quiz
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