Here’s how an IT assessment during a statutory audit can enhance your operations and act as a safeguard against the threat of cyber-attacks and data breaches.
ISA 315 requires us, as auditors, to gain an understanding of your information-processing activities. An Information Technology (IT) assessment, which evaluates the systems and controls in place, is a crucial part of our audit and will offer significant benefits to your business beyond regulatory compliance.
Why an IT assessment matters for your business
Your IT systems are essential to producing accurate financial reports and ensuring smooth business operations. As auditors, we assess these systems and identify any risks or vulnerabilities that could otherwise lead to inaccuracies in financial statements, inefficiencies in operations or potential security breaches.
Key Components of our IT Assessment
- IT General Controls: We review controls over IT operations, including access management, change management and data backup procedures through discussions with IT managers or third-party providers. We check these controls to ensure your IT systems are properly managed and protected.
- Application Controls: These are specific controls within software applications that ensure data integrity and processing accuracy. We assess controls related to data input, processing, and output to verify the reliability of financial reports. It is important to consider whether software used has been designed for your business or whether these are generic “off the shelf” packages such as Xero or Sage as this can impact the risk of the IT assessment.
- Cybersecurity: With increasing cyber threats, we are required to examine your cybersecurity measures. This includes evaluating firewalls, antivirus software, encryption methods, and incident response plans to protect sensitive financial data from breaches.
- Compliance with Regulations: The assessment ensures that the IT systems comply with regulatory requirements such as the General Data Protection Regulation (GDPR) and industry-specific standards. This is important to ensure that you avoid fines whilst maintaining your business’s reputation.
What are the benefits to your business of having an IT assessment
- Financial accuracy: A thorough IT assessment ensures that your financial data is being processed accurately, allowing you to make better business decisions.
- Risk mitigation: By identifying potential weaknesses in your IT systems, we can help you mitigate risks related to data breaches, fraud, and system failures. This proactive approach to risk management can protect your business from financial loss and reputational damage.
- Greater efficiency: Our audit work may identify inefficiencies in your IT processes such as outdated systems or overcomplicated processes. By implementing our recommendations, you may be able to streamline processes, reduce costs and improve operational efficiency.
- Improved security: Technological advances in recent years such as AI, have given rise to more sophisticated fraudulent activity so an IT assessment will evaluate how well-protected your financial systems are from such threats. Addressing any vulnerabilities identified during the audit will help safeguard your business from potential cyber threats or data breaches.
- Compliance: Ensuring that your IT systems are compliant with regulations is a significant benefit from the audit process. Knowing that you are meeting legal requirements, such as GDPR, can give you peace of mind and protect your business from potential regulatory or legal issues.
- Long-term IT improvement: Beyond the immediate audit, our IT assessment can serve as a starting point for long-term improvements in your IT infrastructure. This allows you to invest in the right systems and technologies that will benefit your business in the future.
Maximise the value of your IT assessment
The IT assessment during your audit should not just be a box-ticking exercise. Instead, it should be regarded as a strategic tool that can improve your business operations. By actively engaging with us and implementing our recommendations, you can ensure that your IT systems are not only compliant, but they are equipped to allow you to operate effectively and confidently in the ever-changing world of cyber and technology.
If you have any questions, please do get in touch with our Audit and Assurance team at Ryecroft Glenton.