AUDIT INFORMATION SYSTEMS

AUDIT INFORMATION SYSTEMS

INTRODUCTION

Organizations introduce the use of an information system to add much-needed value to the organization. The amount created can be interpreted to provide additional benefits cut costs dan d inspire confidence in their operations. The audit information system refers to the inspection of an organization system controls within the parameters of the Information Technology setting. The purpose of the audits is to determine how well these systems are functioning well; its data is safe-guarded and has the highest form of integrity. Most organizations use IT, and therefore there is a need to audit these systems to keep them safe from manipulation of computer attacks. These advantages of this Information systems to a business include; enhance better service delivery; they cut down on costs, growth in communication; increase efficiency. IS audit’s primary objective is to reduce risks and increase certainty. It is essential that these systems are kept in check because companies primarily rely on them.

IT AUDIT(Hall 2016)In preparation to carry out an edit, several factors are essential, including assessing the risks involved and gathering evidence to back up this audit. It is done by conducting interviews, observing and checking system documentation. The next step will be testing the controls and determining if they are functioning. The processes in auditing vary for different organizations. The most common involve audits to do with finances, fraud and internal audits. The different types of audits include; internal audit, operational IT audit, financial IT audit, IT-focused edit. Auditors may be internal or external, depending on the nature of the review. The external auditor’s primary purpose is to represent interested parties outside the organization. In contrast, internal editors express the interest of the organization.

EMERGING ISSUES IN INTERNAL AUDIT (chambers and orders 2015)

Several emerging issues relate to internal auditing that often raises a concern, and that includes whose interest they are keen to keep. They cannot satisfy everyone that they can work independently and need external auditing to assess their function. External auditors can rely in part on evidence gathered by internal audit departments that are organizationally independent and report to the board of directors’ audit committee.

NATURE OF INTERNAL CONTROL AND MATERIALITY AND ITS IMPACT ON IS AUDIT CONTROL

The quality of internal control involves the management and protection of objectives that may range from operational efficiency to reliable financial power. These controls reduce risk in the running operations of an organization and keep them in check. There are many controls, one of them being physical control. This control aims to ensure that transactions that take place are valid and secure. The next power includes General control, which widely applies to all systems including, governance, infrastructure, security and application acquisition. Lately is the application control, which ensures that there is credibility in a financial transaction. They include payroll and check digits.

We are going to examine these controls in real life;

Physical Controls

• Independent Verification: An auditor undertaking a stock takes of inventory
• Transaction Authorization: Buying goods from a supermarket and paying with credit card
• Access Control: The locked door to my office

General Controls

• Username and password for accessing the network
• Multi-factor authentication
• Using a purchasing policy to buy software

Application Controls

• PIN for your credit/debit card
• The password to access the internet
• Data entry checks to confirm a student number is accurate
• Cannot enter a pay timesheet for 170 hours a week (there

These internal controls often experience system malfunction, so when the IS audit is done it, its upon the auditor to determine whether the system malfunction is material to the audit. If a system malfunction does not mislead investors or interested parties, then it is not material. A good example is a travel company that uses electronic systems for payment of travel malfunctions and receipts is used, then no loss in income will be experienced, Passengers will pay for travel in cash instead and therefore will not result in financial loss. The decision by the auditor whether the material was relevant to the audit is based on the financial impact it had on the firm.

IMPORTANCE OF INFORMATION SYSTEM

There are various types of information systems used in the business setting to enhance efficiency and help them carry out their day to day activities. Information systems are important since they play a number of key roles in the organization. They do so by processing data from firms’ inputs and produce information that is useful in running an enterprise.

There are some roles, including help management to gather and disseminate information to its employees. Email use by the management can pass relevant information to its employees on activities and duties that are carried out. There are also crucial in the management operations of a company by offering accurate information that is used to run a company efficiently. This can be done by gaining critical knowledge, such as costs over your competitors, by providing a better and improved customer experience. Another significant role this system play is in the making of decisions that affect the company. When a company has complete and accurate information on a subject matter, they can use the information to make sound decisions that can steer the company forward. The last important piece is recording keeping. The systems store files, documents that are essential to the company’s long term growth strategies. This information is an account of the critical running of an organization, such as the storage of companies’ financials.

TYPES OF INFORMATION SYSTEM

There are various types of information systems that help an organization. Still, in this particular instance, we are going to take a look at two information systems and how they play a critical role in the operations of a company. The first one is the transaction processing systems (TPS). It is designed to carry out repeated transactions with minimal errors. Some of the TPS  a business uses include; billing systems that are used to produce invoices that are later sent to customers; systems which calculate the payroll for employees and how much taxes they are owed; stock control systems which keep detailed information of transactions and stock and the requirements needed to run a business.

The next IS that we are going to look at is the Office Automation System (OAS).OAS are systems that are designed to improve upon the efficiency of employees while carrying out their duties. This  OAS includes a variety of software’s that aid in the running of operation of a company and improve upon productivity. They include Microsoft office XP or Microsoft word. This OAS system is efficient and accurate, so they are often reliable.

CONCLUSION

The information systems play a significant role in the running of day to day operations of an organization. They help an organization keep accurate and detailed financial information. The organization also uses this same Information system to aid in the decision-making process. It is safe to safe that this system is reliable and efficient and are critical in an organization.

However, these systems, like any other often, can break down or can be manipulated. It is usually critical and essential for an organization to carry out audits regularly. These audits can either be internal or external, depending on the business.They help in keeping transparency and improve in areas that require them. The nature of internal control is a critical area in IS because it involves the management and protection of objectives that may range from operational efficiency to reliable financial power. This controls reduce risk in the running operations of an organization and keep them in check

In the auditing process, several emerging issues related to internal auditing that often raise a concern, and that includes whose interest they are keen to keep. They cannot satisfy everyone that they can work independently and need external auditing to assess their function. The IS audit is essential to keep investors and interested parties confident and secure.

References

Markgraf; B(2019) Importance of information systems to an organization.

Stettler,  H. F. (1970)Auditing Principles

Maggie k(20100  IT auditing controls-Planning the IT audit

Graham.w and Rodda Neil ( 2009)  Modern Editing