INFORMATION SYSTEMS AUDIT AND ASSURANCE

Introduction
Auditing is one of the most prominent processes that is done by every firm in order to
know the financial position of the company. A true and fair picture of the financial
statements that is known through the auditing process is helpful for the company in
decision making process so that the company can achieve its goals and objectives in
the easier and smooth way. Auditing is usually done in periodical intervals. The
efficiency and experience of the auditor is an important factor in the success of the
auditing. For the auditing purpose, the external auditor has to collect the required
evidences like accounts statements and other information, for conducting the auditing
process. The most critical aspect of audit risk, in which the auditor gives the incorrect
opinion about the financial accounting are to be avoided with utmost care. This essay
analysis the nature of the evidence collected and how the audit evidences are collected
by the auditor in order to ensure the nonoccurrence of the audit risk and to eliminate the
key issues that may occur during the audit process.

IS Risks
The assessment of the potential risk is a vital factor in the auditing process. The audit
risk involved during the auditing period has to be well understood and analyzed. Audit
risk is termed as the risk occurs when the auditor gives an inappropriate opinion about
the financial statements. This will result in an improper auditing process, where there
the financial statements are materially misstated. Hence it is essential for the auditor to
do a thorough check on the financial statements and its fairness with a proper audit
plan. This will ensure the potential risk involved in the auditing process leading to
completion of the auditing process in an effective way. In the situations where the audit
risks are high, then there is a requirement of more evidence related to the accounting
statements. For this purpose, more staffs with more experience levels are to be
appointed in order to carry out a thorough auditing in a successful manner eliminating
the risks involved in it. All these aspects take to the root of the necessity of a formulating
a good audit plan well before the initiation of the auditing.
Audit Plan
The first and the foremost duty of auditor is to formulate an effective audit strategy in
which the purpose and objectives of the auditing is described and this is later executed
along with the amendment with updated objectives required if any. The auditor has to
see nature of evidence, time required to collect the evidence, plan and forecast the
changes that may occur during the auditing due to unexpected conditions in the
company. This may make the auditor to collect information system that is entirely
different from the already collected ones, resulting in more time involvement in
completion of the audit process

Audit Methodology and Process

In order to conduct a proper audit, the auditor has to follow the below mentioned
methodology, which are:

Understanding and Analysis of business: The first and the foremost step in the
auditing process is to know the exact position of the business in the company. This
helps the auditor to set the specific audit objectives and thereby carry out the auditing
process accordingly.

Determine Audit risk: The inherent risks that are to be well known by the auditor is the
suspected mistakes in the account balance and in the transactions. The misstatements
in the accounts can be material which may be an individual error of error or omission
occurred when compared and calculated with other statements. These factors prove it
prominent for a proper audit plan by the auditor. The assessment of the audit and
inherent risks helps to know the nature, quality and quantity of the evidence required to
be collected for the purpose of auditing.

Analysis audit process: The audit process has to be analyzed in an effective way in
order to know if there are any errors or omissions that are to be considered in the
auditing process. A proper analysis on the documents, verification of assets etc. are
needed in this stage.

Communicating results and follow-ups: Once the auditing is done, the audit reports
are communicated to all the departments, where the concerned officials will go through
the audit report. This helps them to know the performance level of the company by
knowing the financial position of the company. If there is any internal audit control
weakness, they are addressed to the audit committee and the required rectification is
done thereafter. This is usually conducted on a periodical basis, say quarterly or half
yearly.
Audit Objectives
The true and fair picture of the financial statements can be derived, which is the ultimate
objectives of the auditing. The auditor has to plan in such a way that he is equipped with
the time, evidence and staffs that can be altered or considerable changes in these
factors can be brought in, with the changes in the internal system that might occur in the
auditing. The evidences collected might be required to change as a result of this factor.
However, a good audit plan will help the auditor to find the resources and make it easy
to collect the necessary audit evidences.

The main objective of the auditor is to execute the auditing in a successful manner so
that he will be able to provide correct information about the trueness and fairness of the
financial statements. Another purpose is it improves the confidence of the management,
who uses the financial statements for decision making process. With the help of the true
opinion of the auditor about the financial statements, the confidence level of the users of
these statements will be increased. This will help the management in implementing the
firms business strategy in accordance with the true financial condition of the firm. The
assets and liabilities of the firm can be utilized in an efficient manner so that the firm can
perform well with increased business profits and efficiency.

Transaction-Related Audit Objectives

While going through the auditing of the various day to day transactions of the company,
the auditor has to look in to the same so that it meets the required audit objectives. The
auditor has to ensure that the transactions that are recorded do exist. It is also required
to ensure that the transaction recorded is complete and there are no omissions. Another
objective of the auditor is to validate the accuracy of the transactions and amount stated
are correct. A proper classification of the transaction has to be ensured along with
correct dates entered for each transaction. The auditor also has to know if the recorded
transactions are properly entered in the journals.
Balance-Related Audit Objectives
This objective is used by the auditor to evaluate the amounts and the information
entered in the financial statements, that is, in the balance sheet is accurate and they
really exist. It is also verified whether the complete information is given in the balance
sheet and they are properly classified. Another objective is to know whether the dates of
balance sheet entries are correct. It is also vital to know that the assets included at the
realizable value.

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