The need for Auditing Services in IT firms

Auditing service means the inspection or the examination of the financial statement of any company or organization. The objective of auditing is to ensure if the company is not going through any fraud or embezzlement.

Information technology is a vast industry consisting of some of the minute parts as well as some of the massive parts so there is a great chance of incorrectness that can occur voluntarily or involuntarily. So to inspect each and every minute detail of a company or industry auditing is necessary.

The requirement of Audit in IT services

Information Technology is a massive industry consisting of many divisions – Software, hardware are some of the primary divisions. Audit service represents the fair record of all the transactions and overall aspects. The audit can be conducted internally by the employees or externally by an outside Certified Public Accountant (CPA) firm. IT auditors examine physical security controls and safety measures, as well as the overall business and financial controls that systematically cover information technology. IT audits to determine whether IT can protect corporate assets or not by ensuring data integrity that should be aligned with the business’s overall targets.

Modern companies are increasingly using their work on computers and the internet; IT audits ensure information-related controls and processes are working correctly and also fixing bugs. The primary objectives of an IT audit include:

  • Determine inefficiencies in IT systems and associated management.
  • Investigate the systems and procedures in place that secure company data.
  • Determine risks to a company’s critical information assets, and help identify methods to minimize the risk regarding the leakage of data.
  • Ensure information management processes comply with IT-specific laws, policies, rules, and regulations and that define certain standards.

Types of IT audits

When it comes to IT audits, we can see there are many types of audits that are essential for bug fixing and other purposes. Some of the types are

  • Innovative comparison audit- involves the detailed investigation of the company’s research and development department and tracking of new productions.
  • Application and system audit– checking of the appropriation, efficiency, reliability, and adequacy of the system and its application.
  • Technological innovative audit– For the new project assessment as well as the older one. The audit will examine the length and depth of the software and the relevant technologies behind it.
  • System development audit– to measure the development of the organizational structure that should be done in accordance with the standard system of development.
  • Intranet/ Extranet, Telecommunication audit– this is a type of audit service to verify the telecommunication procedures and network connectivities.

Basically when we broadly classify the IT audit that signifies a general control review that deals with every aspect, includes both software and hardware analysis in a broad way, and application control review that deals with the insider’s audit includes inspection of the software minutely.

Process for IT Audit

Some of the basic steps that to be followed while conducting an Information Technology Audit process

  • Proper planning of the process
  • Testing and its analysis
  • Evaluation
  • Report preparation
  • Follow up

Some Basic IT audit Principles

  • Transparency of Sources

Transparency needs an explicit reference in the audit of encrypted programs, how the handling of open source has to be understood. E.g. programs, offering an open-source application, but not considering the IM server as open-source, An auditor should take its own position to the paradigm of the need for the open-source nature within cryptologic applications.

  • Checking of the Financial audit

Again, transparency is needed to check whether the audit is funded commercially or developed commercially. This is all about the financial part of the organization of the system.

  • Checking for the manual and technical documentation

Further checking should be conducted to examine the manual and technical documents.

  • Inclusion of LIterature

After the analysis part, an investigator or the reader may be able to judge according to the loop management system, and the development and review should be open to learning for everyone and even considered as notes to others.

Benefits of Auditing in IT Firm

There are many benefits of conducting the audit in the IT sector such as

  • Claiming Insurance

the insurance company will first audit then check out of the damaged part and accordingly, the amount of capital can be given.

  • Determination of Profit and Loss

The auditing will be provided with a complete summary of the company and its overview, which will be helpful for the company to determine its profit and loss. According to that, a businessperson can plan for its future growth.

  • Tax assessment

This part plays a vital role in a business. Tax authorities are entirely dependent on the Tax Auditors so that according to that, they will calculate the tax amount.

  • Fraud Detection

 One of the main goals is to detect the fraud and embezzlement of the organization. The audit process will minutely be done through each department of the company internally and externally. So the audit will give you an indication of the fraud if something is happening.

  • Goodwill of the company

The assessment of the company will provide a complete overview so that the employees, as well as the owner, will get to know the strength and weaknesses of the organization. According to that, the authority will plan out their strategies.

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