System Audit

To err is human, not computers. But that doesn’t mean that you sit back and forgo monitoring the systems working for you. System audit ensures that your electronic accounting system is in fine fettle and working dexterously.

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Businesses have a love-hate relationship with accounting. On the one hand, they can’t survive without it because bookkeeping allows them (and their clients!) to make better business decisions. On the other hand, they find maintaining and auditing books of accounts such a drag. That’s where accounting software come in and transform such a tedious task into a hobby. Modern software systems have replaced many of the old hat, manual, routine-based accounting processes. After all, speed with accuracy matters. Almost every company in the UAE and other parts of the world is using accounting software to manage their bookkeeping journals which necessitates auditing of integrated IT systems.

System Audit in UAE

Big or small, public or private, free zone or mainland, companies are required to conduct several audits on their internal controls, existing systems and financial statements from time to time to acquire management and financial information which is imperative to keep track of everything that can make or break their business. System audit aka IT audit and information system audit is one of them. An all-encompassing analysis of everything that falls into the category of technology infrastructure used by a business, especially the financial and operational system is what we call system audit. It usually involves the structure, the system to safeguard the information, the security mechanisms intended for shielding the information and maintaining the integrity of financial data. The system audit process completes in 6 steps:

System review
Weighing vulnerability of information system
Detection of potential threats
Examination of internal controls
Final evaluations

System Audit: Significance

Debits, credits and all things numbers, business is all about accounting. It’s not called the backbone of businesses just like that. It is accounting only that communicates the health of your business. Gone are the days, where accounting used to be a cumbersome process. Tons of manual entries, huge paperwork and tedious calculations. Thanks to information technology the things are a lot easier and faster now. It’s all automated now! But just feeding details in the system using the best of accounting software and not looking back assuming that everything is safe and protected is an open invitation to risks. To stay up to date about the important information that owners, managers and investors need, by providing them with the right information and to continuously gauge a company’s financial performance, an audit of books of account is what the doctor ordered. And equally important is to audit the system that is being used for record-keeping and accounting purposes.

Performing a system audit is paramount as it lets an organization review the performance of its operational systems. An efficient system audit enables companies to not only assess the actual performance of their operations compared to what was planned but also warrant that the goals pursued by the organization remain relevant.

System Audit: Objective

Conducted with an aim to figure out the vulnerabilities and loopholes in the system and find out ways to enhance the productivity, efficiency, and efficacy of the system, system audit is a process of evaluating and reviewing the information systems installed in an organization up to the hilt. A systematic and independent study to establish whether activities and related results adhere to the planned arrangements and whether these arrangements are implemented effectively and are appropriate and adequate to accomplish goals. The review of IT infrastructure can be conducted concurrently with the financial audit or internal audit in order to confirm that proper control exists in the managing of the information systems and the output produced is authentic and free from fraud or manipulation.

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System Audit: Benefits

A system auditor ensures that the auditee’s information system is effectively placed and functioning properly in line with the objectives of the management. In a nutshell, a system audit tells the auditees how they can improve the productivity, efficiency, and efficacy of the system. Conducting a system audit is beneficial because it –

Betters transparency and provides the organization with an overview of the current information system
Lowers down the chances of fraud and errors
Enhances reliability by covering a range of threats and mitigating them
Helps secure data by way of identifying risks so that the audited organization redesigns or strengthens the poor design
Perks up efficiency in business operations
Detects the loopholes in the system
Brings to light the risky areas in the system security, so management can act proactively and plan before any incident

Adam Global: IT/System Audit Services in UAE

An IT or system audit is conducted with the purpose to evaluate how effectively a company is maintaining their protocols and to navigate the company towards improvement. Effective IT audit services help organizations not only better internal controls and security but also achieve their IT goals and objectives. System audits are performed by IT professionals who are well acquainted with various information systems of an organization and how they can be used to block the abuse of organizational resources. IT systems play a direct role in the value of an organization’s business; therefore, developing them is a must. It involves evaluating the hardware, software, data, and users. Adam Global has a team of qualified system auditors who have years of experience and expertise in handling information system/ IT audits. The system audit specialists at Adam Global are well equipped to interpret the risks in connection with the information systems and they conduct the IT or information system audit keeping in mind all the risks and offer the consultancy and advisory services after identifying all the risks that the business is exposed to. It is the foremost objective of Adam Global in IT audit to provide efficient solutions to the businesses that are vulnerable to the risks associated with the information systems audit.

FAQ

What is the difference between information system audit, IT audit and system audit?

All these terms mean the same in the audit area which helps the management to ensure that the information delivered by their computer-based systems are reliable and can be used by them in further decision making. Besides approving that the electronic systems are dependable the system audit also gauges and maintains the controls over the IT systems and environment by covering a range of threats and mitigating them.

Is system audit different from financial audits in UAE?

Although a system audit can be conducted alongside the financial audit or internal audit, both these audits are like chalk and cheese. While financial audit requires journals, vouchers and bills kind of documents as sources of evidence to come up with final audit papers. System audit, on the other hand, uses the encryption used, the firewall, authorized users and password protection as sources of evidence to generate the final report. This difference in the nature of system audit calls for CISA qualified accountants to perform a separate audit.

Why use computer-based accounting?

In this fast-paced world, you can’t help but switch to IT-enabled systems for your routine and monotonous tasks. Most businesses rely on computerised accounting systems and it’s easy to see why. The automated accounting system in organisations:
1. Reduces human effort and errors.
2. Stores your files efficiently forever unlike stacks of paper that occupies tons of space in your office
3. Have real-time financial information ready.
4. Helps generate automated invoices, credit notes and receipts.
5. Lets the businesses make the most of the innovative financial technology.
6. Saves money on resources.
7. Speeds up record-keeping.
8. Amplifies the speed and efficiency in the work performed by the accounts & finance staff.
9. Makes accounting data available universally.
10. Puts information close to accountants.
11. Enhances the capacity of accounting research and extension specialists to organise, store, retrieve and accounting information exchange.
12. Advances mechanism of information sharing.
13. Prepares accounting database for easy access and data-based decision-making.
14. Simplifies access to the storehouse of information.
15. Allows one accountant to deal with various companies through effective utilization of IT in accounting

What kind of threats or risks does computer-based accounting invite?

With benefits comes flaws. Using electronic systems can lure problems such as computer systems can shut down abruptly, unauthorized access can lead to fraud and manipulations of the data, using the information systems improperly thus increasing the cost to the company. To keep these risks and troubles out of the doors system audit is necessary for organisations.

How information system audit can improve IT governance?

By ensuring that the employees and the IT department in the companies are complying with all the business laws and regulations system audit betters not only IT governance but overall IT management as well.

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