A company’s use of information technology (IT) can have a significant effect on the audit of internal financial control. The IT environment is a consideration in the auditor’s risk assessments, selection of controls to test, tests of controls, and other audit procedures.
The following matters affect the scope of the auditor’s evaluation of IT controls–
- The risks, i.e., likely sources of misstatement, in the company’s IT processes or systems relevant to financial reporting, and the controls that address those risks.
- The reports produced by IT systems that are used by the company for performing important controls over financial reporting.
- The automated controls that the company relies on to maintain effective internal financial controls.
The following types of IT-related risks that could affect the reliability of financial reporting:
Hence, a comprehensive Information System Audit w.r.t Internal Financial Control is must for proper Adherence to Controls
—Manish Agarwal, AMK & Associates—-