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Sas 109 Summary

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Auditors serve an essential role to the business world – they deter fraud by ensuring that public information about business organizations is a faithful representation of their financial status. Therefore, it is crucial for auditors to be knowledgeable in the system of internal controls employed by their clients. As technology continues to impact the nature of how business is conducted, auditors must also understand their client’s use accounting information systems. The Statement of Auditing Standards No. 109 (SAS 109) did not provide information regarding how auditing professionals must use their employers information systems to perform an audit. However, SAS 109 did provide information detailing the facets of an entity’s accounting information systems that must be understood and…show more content…
This includes the classes of transactions pertinent to an entity’s operations and the procedures taken to capture transactional information and other events and conditions. Supporting accounting records may also be inspected along with inquiries as to how incorrect transactions are corrected. Auditors must also be aware of their client’s processes in preparing financial statements, such as closing entries, accounting estimates, and disclosures.

Finally, auditors must be informed on the measures and controls taken at the entry point of the information system. It is essential that only the right people have access to the right data and programs, to prevent security breaches that may compromise the integrity of the entire information system. In essence, auditors must understand the “nature and characteristics of an entity’s use of IT in its information system” to address the risks posed by IT and its users (page 126). Aiding this process may also include interviews with users with access privileges, and an understanding of segregation of
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