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A2 level Information Communication Technology - Unit 4

Audit

Legal Requirements.

It is a legal requirement that all Company accounts have to audited to check that no financial mistake has been made and that no fraud has taken place.

All but the smallest organisations use information technology (IT) systems to record financial transactions instead of paper based systems. Because of the nature of IT systems usually more information is recorded than by paper based systems. This makes the auditor's job more difficult and they need specialist expertise to understand these systems and the organisation.

What an auditor does.

• The volume of transactions means it is difficult to check them all.
• A sample will be taken and checks on all the paths / routes that a sample takes are followed.
• Examine the data files.
• Test the hardware and software.
• Look for evidence of errors and / or fraud.

Audit packages.

Software is available which will save an auditor much of the routine work. The main facilities they offer are:

• Validation of control totals created by the system to show it is in balance.
• Verification of balances.
• Verification of data is present and has not been 'tampered' with.
• Analysis of the data.

Audit trail.

This is the record the system creates showing any transactions and any processing that has taken place.

An audit trail is not restricted to financial systems only. The network computers that you use in schools and colleges will create an audit trail of your use such as:

• when you logged on
• where you logged on
• what applications you used while logged on
• when you logged off

Hardware & Software Audit

An organisation will need to carry out an audit of its hardware and software basically so that it knows what it has, details of licences, legality of the software etc.

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