Audits are a critical and an important part of every company whether performed internally or externally. With the expansion of Kudler Fine Foods and update of their information system, the company must ensure system processes are functioning properly. Conducting an audit will identify any problems with the newly implemented computer system. There are several types of audits that can be performed for each process. The most important factor is choosing the appropriate type of audit that best fits the process. Most audits are conducted similarly and should always be completed in an efficient and effective manner. Furthermore, there are events that could prevent the reliance of an audit through the computer in which management must be made aware of and evaluate accordingly.
Types of Audits
There are various types of audits that will give credence to the accounting records, accounting policies, and financial statements of a business organization. For example, an internal audit can be conducted of the accounting department to examine company policies and procedures as well as development and evaluations of internal controls. Internal audits will provide management with insight and recommendations based on analysis and assessment of data and business processes. An external audit will assess the computer-based accounting system and provide judgment on the accuracy and fairness of financial statements. “The fairness evaluation is conducted in the context of generally accepted accounting principles (GAAP) and requires application of generalized auditing standards (Bagranoff, Simkin, & Strand Norman, 2008, p. 343). Information technology (IT) auditing evaluates the AIS by ensuring data and information is reliable, confidential, secure, and available as required. Additionally, a SAS 94 audit will test for possible risks by reviewing the following areas:…...