Control procedures are important in the efficient operation of an accounting information system (AIS). Organizations have audits to ensure procedures are functioning properly and additional controls are not needed. This research of internal, external, financial, risk assessment, and information technology audits will examine and ensure that internal controls have been correctly placed and properly functioning. Kudler Fine Foods can use audits for their systems’ processes, as they involve information technology (Bagranoff, 2008).
Types of audits
Internal and external audits concern employee adherence to company policies, procedures, and development of internal controls. Audits on information technology involve the evaluation of the computer’s role in achieving audit and control objectives. These audits encompass the components of the computer-based AIS: people, procedures, hardware, data communications, software, and databases. The four types of information technology (IT) audits are Attestation, Findings and Recommendations, SAS 70 Audit, and SAS 94 Audit.
The three types of IT audits that will be used at Kudler Fine Foods will be Attestation, SAS 94, and Financial Audit. IT auditors can use the Attestation and Financial Audits for accounts payable, accounts receivable, and payroll as they confirm that numbers on the financial statements are correct and internal procedures are compliant with regulations. For inventory a SAS 94 Audit can be used to help auditors gain an understanding of how recurring and nonrecurring journal entries are initiated, entered, and processed through the company’s information system. The IT components evaluated are: physical and environment review, system administration review, application software review, network security review, business continuity review, and data integrity review (Bagranoff, Simkin, & Strand, 2008).
Attestation
Attestation audits provide assurance for which the client is responsible, such as...