Today’s auditors must possess additional skills in order to perform their work. As more and more businesses use information technologies (IT) and set up an information system (IS) to process all their data, auditors must get acquainted with essential aspects of their clients’ information systems and also make use of information technology in order to perform their duties. In this essay, we will attempt to answer the following two questions: 1) “What aspects of clients' accounting information systems must be understood by auditing professionals?” and 2) “How should auditing professionals use their firm's information technology in performing their work?”
As the use of information systems has extended over the past decade and continues to do so, auditors must understand that many business entities are in the process of going “paperless”, that is keeping all records in electronic form only. Hence, tasks which were previously performed manually are now completely automated.
Another aspect that the auditor is concerned with when performing an audit for an entity which uses information systems is the process by which authorization to information systems related to financial reporting is granted to certain individuals. The auditor must know who has access and what type of access is authorized, especially because this affects internal control issues.
In other words, the auditor must understand that an information system is as efficient as the people who operate it. If the personnel operating the information system is not well-informed and sufficiently trained in using the IS, mistakes are more likely to happen. Likewise, the engineers in charge of designing the information system might not have a good understanding of the company’s op...
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Works Cited
AU Section 314. Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Supersedes SAS No. 55). Source: SAS No. 109. Understanding the Entity and Its Environment, .83 page 137.
AU Section 314. Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Supersedes SAS No. 55). Source: SAS No. 109. The Standards of Field Work, .60 page 132.
AU Section 314. Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Supersedes SAS No. 55). Source: SAS No. 109. Understanding the Entity and its Environment, .74 page 135.
AU Section 314. Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Supersedes SAS No. 55). Source: SAS No. 109. Understanding the Entity and its Environment, .86 page 138.
Table 3-4. Likelihood Definitions, National Institute of Standards and Technology (NIST): Risk Management Guide for Information Technology Systems. Special Publication 800-30, 2002.
Creditability for the IMA standards has three parts to it, 1) Communicate information fairly and objectively. 2) Disclose all relevant information that could reasonably be expected to influence an intended user 's understanding of the reports, analyses, or recommendations. 3) Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law. Molly broke the ethical code of credibility when she changed the calculation of manufacturing overhead to based on machine hours. She was not objective with her data; she didn’t disclose the relevant information that was asked of her. She changed the calculation because the original would influence Mr. Robert’s.
FASB Codification. Digital image. FASB Accounting Standards Codification Professional View. FASB. Web. 28 Nov. 2010. .
Section 5062 of the California Accountancy Act refers to professional standards. To which professional standards do you think they are referring?
This incorporated the intending to guarantee that the tools and facilities are placed to ensure the data is gathered in the appropriate way and the GCU employees are appropriate train, aware and drilled in the prerequisites so any proof gathered and put away is done as such in a way that will make it permissible in any lawful or inside disciplinary procedures. They have to decide the prerequisite on how that confirms it will be gathered without obstructions with the GCU organization process, an orderly way process that confirms capacity can altogether decrease the expenses and time of an interior examination, such as a way that the GCU deal with confirms
As technology progresses it can truly change how a business operates in terms of accounting and financial reporting. Online software has become a widely used system by many businesses around the globe. Financial reporting is essential to any business especially when seeking for potential investors or stakeholders. The reason being is because a financial report contains all of the records of how a business is performing financial wise. Likewise there are purposes of securities regulations and the main one is to disclose any schemes.
Financial Accounting Standards Board. (2006, July 6). Conceptual Framework for Financial Reporting. Financial Accounting Series , 1-55.
According to the article authored by Mark Rupert, what are the seven best practices in the roles and responsibilities of an internal audit function?
In many cases, the additional time and cost to conduct a quantitative analysis is not justified. Some risks with qualitative consequences, e.g. reputation damage, must be transformed into a quantitative amount. Quantitative assessments may be required in some instances, due to regulations, industry norms, or high-risk environments (ISO/IEC, 2009). It is important to be aware that while quantitative assessments look extremely precise, they are only as accurate as the data used to generate the estimate.
Accountants are able to make better decisions and direct business owners better on how to grow their businesses. Individuals have also benefited from the technology; one can easily access to their bank information and keep track of their expenses. Technology helped accountants eliminate papers, pens, calculations, errors and time. Today, with the help of computers, printers everything is being done faster and with very little mistakes. As technology grew, accountants have been introduced to new equipments, software, Internet based communication systems and better security systems. Most of the accountants have computers, printers, and fax machines in the offices. Everything is being calculated, stored, and organized in the computerized programs. Time is very valuable for everybody; with these inventions accountants accomplish their job responsibilities much better and faster. One does not need to travel long distances to provide finance reports; instead they can easily connect to each other via Internet and provide their results online. Beside Internet, accountants also can fax over the document to the firms they
I am interested in conducting research and teaching in managerial accounting, auditing and assurance services and accounting information systems. In particular, I am interested in exploring the role of accounting information systems in decision making, internal control, and auditing. In order to gain an appreciation of these and related issues, it is essential for me to have a strong grounding accounting, accounting information systems, information technology, managerial accounting, as well as gain a general economic and management perspective.
An Accounting Information System (AIS) can be defined as software that helps accountants to collect data and process it to create information ((Bagranoff, Simkin and Norman 2010)
The major characters of the tradition audit are all information what is needed by auditors are on the paper and the manual calculators and without high communication technology. Auditors usually were limited by the place in the paper time. When a several people are working on the same auditing project for a client with offices in cities across the country, even worldwide, it takes a lots all time those auditors get the information which they need from the client, even there is risk paper information disappear for many reasons. on the another hand, mail paper information increase the auditing cost. The mistake caused by the manual calculators inevitably, no matter how fixed auditors concentrate on recalculate is, after all auditors are human. The global business become major in the modern business world, some example, several auditors who are in different locations are working a same auditing project, or auditors are in different city even country with the client, when there is issue among these auditors or between auditors and client, they only can communicate with each other by phone or be together and have meeting. Phone call can not make sure information been watched in the same time when the voice is talking about the issue, but having a meeting takes time and money make all people together, it increases auditing cost.
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.
Nowadays with the implementation of new emerging technologies, the way businesses keep this financial information has become computerised. At the moment businesses use computers with a computerised accounting system in order to perform many other new activities than what they were able to do in the past. Businesses can access financial information from different department in the organisation, access to the information through computers and find financial data very fast, being more efficient. (Beliss, 2013)