Module No 1

Use of IT in Auditing (KTP 2)

 What is an IT Audit
• An audit of an organisation’s Information Technology (IT)
systems, management, operations and related processes
• IT audit may be carried out in connection with a
financial/compliance regularity audit or selective audit.
• As the records, services and operations of many
organisations are often highly computerised, there is a
need to evaluate the IT controls in the course of an audit
of these organisations
 Objectives of IT Audit
• Review of the controls of the IT systems to gain assurance
about their adequacy and effectiveness.
• Evaluation of the processes involved in the operations of a
given area such as a payroll system, or financial
accounting system.
• Evaluation of the performance of a system and its security,
for example, a railway reservation system.
• Examination of the system development process and the
procedures
 Types of Audits

Compliance Selective
Financial Audit & Audit
Statement Internal (Excess/
Audit Control Inefficiency/
Audit
Waste)
 Data extraction, summarizing, aging,
General purpose
stratification, duplicate checks
software

CAATS – Structured Query Defining & manipulating data

Useful to Language

conduct IT Discovering patterns in large data sets, and extract

Data mining information from such datasets and transform into
Audit an understandable structure

activities Analyzers, configure, optimize or maintain

Utility Software
the ICT infrastructure

Well developed Self shelf which gives auditor read only

systems access to ERP data through interface
applications
 Benefit of CAATS
• Substantive testing and analysis of large volumes of data
can be done within a short span of time and with less
effort
• Tests can be repeated easily on different files/data
• Flexible and complex tests can be done with change in
parameters
• Automated Documentation of audit tests and results
• More efficient deployment of audit resources
 Problems of CAATS

Getting the Getting the

wrong files Wrong layout

PROBLEMS!
Documentation is
Prejudging results
out of date