Essay On Internal Control

The Internal Controls used in Computerized Systems

As an auditor, whether internal or external, junior or senior, you will be exposed to computerised financial reporting, when working with clients, and therefore, a basic knowledge of computers is expected. We can for example, look at the way in which businesses pay employees, creditors, etc, though EFT's (electronic fund transfers) - us meaning that understanding how this is controlled is of importance when auditing payroll/acquisition systems.

One of the specific objectives on internal control is to achieve reliable reporting. This is also referred to as the production of information by the information system which is valid, accurate and the complete risk of material misstatement in the financial statements is significantly

The structures of the IT section may include a steering committee and a chief information officer.

This components other function will be to focus on the assessment of the IT risks facing the company, e.g. data security and privacy, business continuity, data recovery, and keeping up with technology.

3. The information system including business processes relevant to financial reporting

The information system consists of infrastructure, software, people, procedures and data. When the auditor is gathering information about this component, he/she will have to familiarize themselves with each of the components and how they interact. ISA 315 explains the information system relevant to financial reporting objectives, which includes the accounting system, consists of the procedures and records designed and established to:

• Initiate, record, process and reported entity transactions, events and conditions and to maintain accountability for the related assets, liabilities and equity;

• Resolve incorrect processing of transactions;

• Process and account for system