Question

Write a report about the applications of standards for auditing systems.

Answer 1

Write a report about the applications of standards for auditing systems.

To ensure that information provided in the financial statements are of high quality and are acceptable worldwide the Auditing and Assurance Standards board under the council of Institute of Chartered Accountants (ICAI) have formulated few Standards. These are in line with the International Standards issued by the International Auditing and Assurance Board (IAASB).

Standards issued by the AASB include :

Standards of Quality Control (SQCs) For all the services under Engagement Standards. These standards are applicable to all auditing firms which perform audits and reviews of historical financial information including assurances and related service engagements.

Standards on Auditing (SAs) For auditing historical financial information. These apply whenever any independent Audit is carried out.

In simpler words, whenever an independent examination of financial information is carried on for ANY entity whether the business motive is t make the profit or not, whether the size of the entity is big or small or even if the entity has any legal form (unless any lays specifies something else) the SAs will be applicable

All SAs are interlinked and have to apply in unity. The number given to SA is similar to the numbering system followed for International Standards on Auditing formulated by IAASB.

Standards on Review Engagements (SREs) for reviewing historical financial information

Standards on Assurance Engagements (SAEs) for assurance engagements other than the audits and reviews of financial information

Standards on Related Services (SRSs) for all engagements about the application of agreed procedures to information, compilation engagements, and other related services engagements

Software Audit

A software audit review, or software audit, is a type of software review in which one or more auditors who are not members of the software development organization conduct "An independent examination of a software product, software process, or set of software processes to assess compliance with specifications, standards, contractual agreements, or other criteria".

"Software product" mostly, but not exclusively, refers to some kind of technical document. IEEE Std. 1028 offers a list of 32 "examples of software products subject to audit", including documentary products such as various sorts of plan, contracts, specifications, designs, procedures, standards, and reports, but also non-documentary products such as data, test data, and deliverable media. Software audits are distinct from software peer reviews and software management reviews in that they are conducted by personnel external to, and independent of, the software development organization, and are concerned with compliance of products or processes, rather than with their technical content, technical quality, or managerial implications.

Application Audit

An application audit is a specific audit of one application. For example, an audit of an excel spreadsheet with embedded macros used to analyze data and generate reports could be considered an Application Audit. Application Audits can also pertain to a business process that heavily relies on various information technology systems. An example would be the payroll process of a company, which may span across several different servers, databases, operating systems, applications, etc. Application audits can also be of a more technical nature like of a PBX or a single data warehouse. These audits can be done as the system is developed, at post-implementation, or on a regularly scheduled basis (annually, every 5 years, etc.). Whichever stage of audit review is being carried out, the IS Auditor is looking for assurance that the application provides an adequate degree of control over the data being processed. The level of control expected for a particular application is dependent on the degree of risk involved in the incorrect or unauthorized processing of that data (Oliphant).