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Information technology audit

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An information technology (IT) audit or information systems (IS) audit is an examination of the controls within an entity's Information technology infrastructure. These reviews may be performed in conjunction with a financial statement audit, internal audit, or other form of attestation engagement. Formerly called an Electronic data processing (EDP) audit, an IT audit is the process of collecting and evaluating evidence of an organization's information systems, practices, and operations. Obtained evidence evaluation can ensure whether the organization's information systems safeguard assets, maintains data integrity, and is operating effectively and efficiently to achieve the organization's goals or objectives.

IT audits are also known as automated data processing (ADP) audits and computer audits.

Purpose

An IT audit is not entirely similar to a financial statement audit. An evaluation of internal controls may or may not take place in an IT audit. Reliance on internal controls is a unique characteristic of a financial audit. An evaluation of internal controls is necessary in a financial audit, in order to allow the auditor to place reliance on the internal controls, and therefore, substantially reduce the amount of testing necessary to form an opinion regarding the financial statements of the company. An IT audit, on the other hand, tends to focus on determining risks that are relevant to information assets, and in assessing controls in order to reduce or mitigate these risks. An IT audit may take the form of a "general control review" or an "application control review". Regarding the protection of information assets, one purpose of an IT audit is to review and evaluate an organization's information system's availability, confidentiality, and integrity by answering questions like:

  • Will the organization's computer systems be available for the business at all times when required? (Availability)
  • Will the information in the systems be disclosed only to authorized users? (Confidentiality)
  • Will the information provided by the system always be accurate, reliable, and timely? (Integrity).

There are 3 systematic approaches to carry out an IT audit(goodman and lawless):

  • technological innovation process audit:

the aim is to construct a risk profile for existing and new projects by assessing the length and depth of company's experience in its chosen technologies, its markets, project organization and industry structure

  • innovative comparison audit:

analysis of business's innovative abilities compared to competitors. it require examination of company's track record in new products, r&d facilities etc.

  • technological position audit:

this reviews the technologies needed by the business and places them in in one of the four categories of base, key, pacing and emerging

Types of IT

  • Systems and Applications: an audit to verify that systems and applications are appropriate to the entity's needs, are efficient, and are adequately controlled to ensure valid, reliable, timely, and secure input, processing, and output at all levels of a system's activity.
  • Information Processing Facilities: an audit to verify that the processing facility is controlled to ensure timely, accurate, and efficient processing of applications under normal and potentially disruptive conditions.
  • Systems Development: an audit to verify that the systems under development meet the objectives of the organization, and to ensure that the systems are developed in accordance with generally accepted standards for systems development.
  • Management of IT and Enterprise Architecture: an audit to verify that IT management has developed an organizational structure and procedures to ensure a controlled and efficient environment for information processing.
  • Client/Server, Telecommunications, Intranets, and Extranets: an audit to verify that controls are in place on the client (computer receiving services), server, and on the network connecting the clients and servers.

IT Audit Process

Main article: Information Technology Audit Process

The following are basic steps in performing the Information Technology Audit Process:

  1. Planning
  2. Studying and Evaluating Controls
  3. Testing and Evaluating Controls
  4. Reporting
  5. Follow-up

History of IT Auditing

Main article: history of information technology auditing

The concept of IT auditing was formed in the mid-1960s and has gone through numerous changes due to advances in technology and the incorporation of technology into business.

IT Audit Topics

US Regulations and Legislation Related to IT Audits

Several information technology audit related laws and regulations have been introduced in the United States since 1977. These include the Gramm Leach Bliley Act, the Sarbanes-Oxley Act, the Health Insurance Portability and Accountability Act, the London Stock Exchange Combined Code, King II, and the Foreign Corrupt Practices Act.

Companies with Sarbanes-Oxley certification delays and material weaknesses caused by IT issues:

  • Captaris Inc. - material weakness and filing delay due to inadequate internal controls and related IT controls per SOX requirements
  • Cray Inc. - numerous material weaknesses in internal control over financial reporting, specifically, inadequate review of third-party contracts and lack of software application controls and documentation

European Union Regulations and Legislation Related to IT Audits

Security

Main article: Auditing information security

Auditing information security is a vital part of any IT audit. Within the broad scope of auditing information security we find topics such as data centers, networks and application security. Auditing information security covers topics from auditing the physical security of data centers to auditing the logical security of databases and highlights key components to look for and different methods used for auditing these areas. It is important to remember that in this ever expanding technical realm these things are always changing and as such IT auditors must continue to expand their knowledge and understanding of systems and the systems environment to help verify and ensure information security.

Evaluating IT Audit Personnel Qualifications

There is no pre-defined skill set that is required when evaluating the qualifications of IT audit personnel. Since auditors will be responsible for evaluating the controls affecting the recording and safekeeping of assets, it is recommended that IT personnel have detail knowledge regarding information systems with a general understanding of accounting principles. Usually, it is desirable that IT audit personnel have received or qualify to receive the Certified Information Systems Auditor (CISA), Certified Internal Auditor (CIA), Certified Information Systems Security Professional (CISSP), Certified Public Accountant (CPA), Diploma in Information System Audit (DISA from ICAI) and Certification and Accreditation Professional (CAP) credentials. The CISM and CAP credentials are the two newest security auditing credentials, offered by the ISACA and ISC2, respectively. Strictly speaking, only the CISA title would sufficiently demonstrate competences regarding both information technology and audit aspects.

Outside of the US, various credentials exist, with differing value and safeguards of professionalism. E.g., the Netherlands has the RE credential (as granted by the NOREA(Dutch site) IT-auditors' association), which among others requires a post-graduate IT-audit education from an accredited university, subscription to a Code of Ethics, and adherence to strict continuous education requirements.

Employees involved in IT audits

Professional certifications of note

Emerging Issues

Technology changes rapidly and so do the issues IT auditors must face. From biometric retinal scans to protecting physical security to transmitting data from a cell phone, this issue is truly limited only to one’s imagination.

See also

Operations

Auditing systems, applications and networks

Computer Forensics

Irregularities and Illegal Acts

External links

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