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What is System Audit? Why is it important for your business?

Why do you need to do a system audit?

The thorough and careful examination of an organization’s information technology infrastructure is called system audit which is also known as the information system (IS) audit. System Audit is carried out to determine if the information system in place is making sure the data integrity, safeguarding the organization’s assets and operating, efficiently to help the organization in achieving its goals and objectives. An information system audit also evaluates inefficiencies or loopholes in the current system and suggests ways to overcome such deficiencies.

System Audit

How the Information System Audit is different from Financial Audit:

The main objective of financial audit is to evaluate whether the financial statements are giving a true and fair view of business financial position and free from any material errors while information system audit is mainly concerned with the data security, the effectiveness of IT infrastructure and the design of system’s internal control.

Information System Audit Process:

System Audit Process can be divided into the following six steps

  1.   System Review
  2.   Measuring Vulnerability of Information System
  3.   Identification of potential threats
  4.   Checking of Internal Controls
  5.   Final Evaluations

Step 1- The System Review:

In the first step, the auditor tries to understand the organization’s information system by observing installation processes, inquiry sessions with installation staff and going through installation documents. At this stage, the auditor tries to find the weakness in the management control.

Step 2 – Measuring Vulnerability of Information System:

In the second step, all the computers and applications are examined individually to find out the most vulnerable one. At this stage, the quality protocols are reviewed by the auditor.

Step 3 – Identification of Potential Threats:

In the third step, all types of external and internal threats to the system are identified including the programmers, system security personnel, normal users, software vendors, data entry operators, etc.

Step 4 – Checking of Internal Controls:

In the fourth step, the system auditor evaluates the effectiveness of the information system’s internal controls and checks whether all the controls are working accurately. The auditor also tries to identify the missing links in internal controls.

Step 5 – Final Evaluations:

In the fifth and final step of the system audit, the auditor performs a series of tests to evaluate the various components of the information system. These tests include checking the flow of data and authorization of data, comparing manual data with computerized and confirming data with external sources.

Benefits of System Audit:

A system audit ensures that the entity’s information system is effectively placed and working properly to support the cause of the management.

The key benefits include:

  • Reduce the possibility of fraud and errors
  •  Improve efficiency in business operations
  • Find out the loopholes in the system
  • Identify risky areas in the system security, so management can do their planning before any incident

How A & A Associates Can Help:

Our auditors are very well trained in conducting system audits according to the latest industry standards. Our audit members always try to add extra value to your current system by applying their skills and vast industry experience.

 

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