COMET: An Application of

An important problem faced by auditors is gauging how much reliance can be placed on the accounting systems that process millions of transactions to produce the numbers summarized in a company's financial statements. Accounting systems contain internal controls, procedures designed to detect and correct errors and irregularities that can occur in the processing of transactions. In a complex accounting system, it can be an extremely difficult task for the auditor to anticipate the possible errors that can occur and evaluate the effectiveness of the controls at detecting them. An accurate analysis must take into account the unique features of each company's business processes. An important problem faced by auditors is gauging how much reliance can be placed on the accounting systems that produce the numbers summarized in the financial statements. Accounting systems contain internal controls, procedures designed to detect and correct errors and irregularities that can occur in the processing of transactions. In a complex accounting system, it can be an extremely difficult task for the auditor to anticipate the possible errors that can occur, determine their downstream effects in the accounting system, and evaluate the effectiveness of the controls at detecting them. An accurate analysis must take into account the unique features of each company's business processes. In the United States, the Securities and Exchange Commission requires a yearly independent audit of the financial statements of public companies.