Question

Financial audits, Operational audits, Compliance audits, Information System Audits

Which of these audits do you consider most important and why?

Answer 1

Financial audits are audits intended to express opinion about the fairness, consistency and adherence to the government regulations on the financial information of the company. Financial audits is also performed to assess the profit or loss of the company.

Operational audits are performed to assess whether the operations of a department or unit are functioning efficiently, effectively and in conformity to the management decisions.

Compliance audit is to assess if the organization or the client has adhered to the federal and state laws and its regulations.

Information System Audits are audits used to examine the management controls which are used within an information technology infrastructure.

Personally speaking, I believe that financial audits are the most important. This is because it is pertinent for the management to know how the business is running in monetary terms. The main purpose of a business is to maximize profits. The management will know if the company is making profits or is in debt only if the financial audit is performed. This information is essential for the management to run the business successfully. If there is less profit than expected or there is a alert for debt, then it is time for the management to assess the operations of the business. Next, the compliance audit is a measure to assess if the organization has complied with that of the regulations. Thus, compliance audit and information system audits are performed at a later stage to understand their non-compliance.