Internal Auditing Essay

539 Words3 Pages
Internal auditor and IT Development Challenges. The function of the internal auditor varies widely in practice from company to company. Many organizations, usually small ones, have no internal audit function at all, where as, at the other extreme, those who are referred as internal auditors are often an integral part of the accounting system itself. Furthermore, the nature of the work performed varies even more greatly- from a largely clerical checking of paper work to the appraising and approving of new systems and policies. (Gage, 1974). The dramatic influence of IT on internal controls and the whole subject matter of internal auditing in a computerized environment have meant that the auditor requires some degree of EDP skills and knowledge. The auditor will be required to communicate with system and EDP personnel and gain their confidence so as to determine the systems and procedures in operation. This requires an understanding of the data processing principles being employed; the terminology used by these people and a general awareness of the functions being performed, in order to ask the necessary questions intelligently. The auditor must be able to interview these technical people, review the systems and operating documentation and observe operations of the installation with some degree of understanding(Gage, 1974). As the auditor receives information be observation, enquiry and review, he must be able to assimilate it and reach independent conclusions as to its usefulness and reliability. He must have sufficient knowledge of the structure and techniques of computer controls to form a conclusion as to the effectiveness of the control system in particular situations. To be able to test systems and procedures for compliance, he must be able to examine with understanding batch control logs; error reports, console printouts and other computer produced
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