Definition of Auditing
DEFINITION OF AUDITING
Auditing is described as the independent examination of and expression of an opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation. Thus auditing of information systems can be defined as independent examination of and expression of an opinion on the development, documentation and controls of information systems of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant company requirement. The purpose of an audit is not to provide additional information but rather it is intended to provide the users of the systems with assurance that the information provided/presented to them is reliable.
The word ‘audit’ when used in this context will mean the independent investigation into the quality of an enterprise computer system
The need for an audit
Today most businesses are computerized and there is need for assuarance that the systems are efficient and secure for the company there exists the risk that the computer systems maintained and the output (eg financial statements) prepared by the users might not be accurate, free from bias and reflect the true position and performance of the company. The auditor carries out this independent examination.
Type of audit
Auditing of information systems requires an examination of procedures or records for reliability and accuracy. At the end the auditor can add new ones, modify existing ones or scrap old ones. Attention is paid mainly to:
a. Company internal control system. b. Laid down guidelines and procedures. c. As changes made without auditors’ knowledge. d. Records of the company.
Advantages
1. Reveals any inefficient procedures. 2. Identifies strengths and weaknesses in the internal control system. 3. Creates harmony and co-ordination of company decision making process. 4. Identifies any bureaucracies
Auditing is described as the independent examination of and expression of an opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation. Thus auditing of information systems can be defined as independent examination of and expression of an opinion on the development, documentation and controls of information systems of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant company requirement. The purpose of an audit is not to provide additional information but rather it is intended to provide the users of the systems with assurance that the information provided/presented to them is reliable.
The word ‘audit’ when used in this context will mean the independent investigation into the quality of an enterprise computer system
The need for an audit
Today most businesses are computerized and there is need for assuarance that the systems are efficient and secure for the company there exists the risk that the computer systems maintained and the output (eg financial statements) prepared by the users might not be accurate, free from bias and reflect the true position and performance of the company. The auditor carries out this independent examination.
Type of audit
Auditing of information systems requires an examination of procedures or records for reliability and accuracy. At the end the auditor can add new ones, modify existing ones or scrap old ones. Attention is paid mainly to:
a. Company internal control system. b. Laid down guidelines and procedures. c. As changes made without auditors’ knowledge. d. Records of the company.
Advantages
1. Reveals any inefficient procedures. 2. Identifies strengths and weaknesses in the internal control system. 3. Creates harmony and co-ordination of company decision making process. 4. Identifies any bureaucracies