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Audit Proposal

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Audit Proposal

By: Catherine Chase

Instructor: Khatrina Higgs, CPA

ACC/542

Audit Proposal

Abstract
Understanding the audit process and how auditors operate is vital since it informs IT managers how to develop an environment that is compliant. More importantly, this brief will discuss the role of the auditor and its responsibilities as well as expand on the role and responsibilities of management during and after the audit. This brief will also focus on the methodologies of how auditors conduct the IT audit process and the specifics that are involved in performing an audit as well as the responsibilities of management.
Financial Audit vs. IT Audit
The primary objective of a financial statement audit is to ensure that …show more content…

Additionally, AICPA issued SAS No. 90, which requires Auditors conduct open and frank discussions with management and the audit committee relating to the quality and the acceptability of the organization 's accounting principles as it pertains to its financial statements. These discussion should generally also include matters relating to the consistency and application of the accounting policies as well as the clarity and completeness of the financial statements (Reinstein & Houston, n.d.).
The new rules by the SEC 's require audit committees to include a report in the company 's proxy statement that informs shareholders of the committee 's financial oversight responsibilities.
Auditing Around The Computer
The auditing around the computer approach is pragmatic when computer applications are simplex. Moreover, SAS No. 94 doesn’t eliminate the use of this technique, rather, this approach may be well suited for firms using a variety of accounting software that process applications periodically, or where the audit trail generated is extensive and allows outputs to be referenced back to inputs. However, one of the primary weaknesses of auditing around the computer is that it is unable to determine whether the program logic is correct, nor does this approach reveal how the automated controls respond to a wide variety of transactions that contain errors. Therefore, in a complex IT environment, this approach may potentially overlook significant errors rendering it

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