Chapter 10, Problem 1WE

Program Plan Intro

Information system:

• An information system is a system which provides the necessary information to an organization to achieve the goals.
• It monitors the transactions details, provides the required information to decision makers, and provides necessary documents to customers.
• The main components in the information system are people, data, procedures, hardware, as well as software.
• The main function of information system is to accept and process the input data and then stores the retrieved information and distributes it across the organization.

Importance of auditing:

• Auditing involves analyzing of financial condition for an organization.
• It determines whether financial statements and reports produced by financial MIS are accurate.
• The sound auditing procedures are required.
• It can reveal potential fraud.
• It can reveal false or misleading information.

Example of audit:

The financial statements such as income statements and balance sheets are been used by many people as well as organizations. The sound auditing procedures are been required in this case.