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In: Accounting

1. The role of IT departments has increased quickly and has taken a more important role...

1. The role of IT departments has increased quickly and has taken a more important role both for businesses and accounting firms. What are some practices which are important for employees and clients to take to prevent breaches in security? What are some sources of digital evidence auditors can use?

2. What steps must an internal auditor take in order to take a proactive role in preventing and detecting financial statement fraud?

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Expert Solution

1. The role of IT departments has increased quickly and has taken a more important role both for businesses and accounting firms. What are some practices which are important for employees and clients to take to prevent breaches in security? What are some sources of digital evidence auditors can use?

A security Breach happens when there is an unauthorized access toorganih of secusystem. There are many preventive measures for avoiding breach of security. some of them include:

  • Limited Access to Critical Data - When a limit is established for viewing documents and accessing valuable information, the chances of any security reaches reduces.
  • Security Awareness Training to Employees - A proper training program to empployees must be given at appropriate intervals, as employees are generally proved to be weakest link in data security chain.
  • Update Software - Software update is another important measure to prevent breach of secutiry. It is a professional recommendation to keep all the application software and twroperating systems updated. This is an easy and cheaper way to stregthen your network.
  • Cyber Breach Plan needs to be developed - This helps both employees and employers to understand potential damagesthat may occur. A good response plan can help in keeping a limit for lost productivity and prevent negative publicity,

2. What steps must an internal auditor take in order to take a proactive role in preventing and detecting financial statement fraud?

Major roles and reponsibilities of internal auditor for prevention and detection of financial statement fraud includes:

  • To work with board and management to make sure that system is in place to ensure that all the risks areidentified and analyzed.
  • Provide support to the company's anti-fraud programs.
  • Report risk management issues and internal control deficiencies determined, directly to the audit committee.
  • To review and report on the accuracy, timeliness and relevanceof the financial statements that is provided for management.

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