Kudler Fine Foods (KFF) is a fine foods retailer with three locations. KFF has been advised to switch from the Retail Enterprise Management System (REMS) to a more customized system. Internal Controls and Risks have been evaluated and suggestions made to enhance the performance and deter risks. The next step is to evaluate the auditing processes. Audit Proposal Introduction Auditing is a subset of evidence, which is a subset of pledge. Distinguishing between the dissimilar types of audits exercised in the auditing procedure as well as the kind of audit applied for each business procedure is vital in understanding the audit process.
Additionally there are series events that may culminate to avert reliance on auditing through the computer. Incorporated is a page outline of proposal on how to guard the corporate computer system and the integrity of the information. Different Types of Audits Different types of audits and even as an audit can have several reasons, each audit can typically be explained as one of the subsequent types.
A fiscal audit looks at the accounting and reporting of financial statements. A compliance audit is executed to decide if the corporate divisions are hold to Federal, State and Kudler company systems applicable rules, policies, and procedures.
Information technology audit deals with internal control environment of automated information processing systems and how these systems are exercised all over the organization. Process audit inspects if a corporation is employing available resources in the best efficient, proficient, and money-saving way to accomplish the corporate assignment and purposes. Research and take notes audits occur as a result of strange or doubtful movement by an individual or a department. A take notes audit is typically guided six months after an internal or external audit report has been delivered.
This is designed to evaluate corrective action that has been taken on the audit issues details in the initial report. You need to be able to have the ability to see data through a system from entry to extraction so that when you make recommendations you can support your decisions with best practices and using one technology over another. Recommend the audit most appropriate for each process Audit Recommendation The recommendations of the KFF’s audit is based three audits that can be used the attestation, SAS 94, and SAS 70.
The attestation provides a report KFF management’s to disclose the IT information for integrity of the payments system used to conducts all financial system transactions. (Hunton ,2004), the attest services also provide information about WebTrust engagement is to evaluate a company’s Web site according to American Institute of CPA’s (AICPA/CICA) standards. (Hunton, 2004), the purpose of a SysTrust engagement is to evaluate the reliability of KFF’s business information system. With the SAS 94, KFF will conduct to test the IT ability uses and controls.
These are usually based on KFF’s system using these examples below: •IT systems that significantly automate the process of initiating, recording, processing or reporting financial information, such as integrated enterprise resource planning systems(Cerullo, V. & Cerrullo, M. J. , 2011). •Electronic data interchange and payment transfer systems that electronically transmit (paperless) orders and payments from one computer system to another system that provide electronic services to customers (Cerullo, V. & Cerrullo, M. J. 2011) . •Computer programs containing algorithms or formulas that make complex calculations, such as automatically computing commissions, allowance for doubtful accounts, reorder points, loan reserves and pension funding calculation (Cerullo, V. & Cerrullo, M. J. , 2011). Lastly, the SAS 70 examines and analyze KFF’s IT controls for its related processes and the effectiveness of its internal control environment. This would based of it’s with Type I audit to detailed testing and walkthrough of it controls. Identify events.
Identify events that could prevent reliance on auditing through the computer: Events can play an important part in obstructing computer auditing. Computer failure and malfunction can wipe out the information. Security breach, Intranet and Internet breach are a few that can cause problems for the reliance of information. Input of false information and or deletion of important information can cause problems. Employee’s termination of those in the accounting and finances area of the company can lead to theft, unsecure documentation can also red flag the reliance of the information contained in computers.
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