Information Technology Impact on Audit Process


The use of information technology has been on the rise in the recent time. Many companies and businesses are heavily investing in acquiring and installing IT systems. There are a lot of advantages of this. Businesses are now turning to information technology to streamline their activities. This has changed how businesses run their activities. However, apart from all benefits that information technology brings about, but there are also negative effects that IT technologies have on the audit process. This paper will discuss the effect of information technology on the audit process.

IT has replaced the manually performed controls which are usually slow with computer controls which are much quicker and more efficient. A computer can handle complex business transactions within a short time. This also reduces human mistakes as computers are able to perform error free accounting functions. Management can, therefore, use this error free information to make quick decisions since computer based accounting is quicker than the manual based accounting.

It is also important to note that over reliance on computer based accounting can also have some major setbacks. The management should carefully look at the risks involved before installing any IT system.

Trained personnel

An organization will have to acquire qualified personnel who are able to handle the new IT system. The organization has also to train its current employees on how to manage the system.

Unauthorized access

Since all information is stored in one place, malicious people may take this opportunity to gain access to the system.

Computer or system failure

Computers are prone to system failures. The audit process is usually affected tremendously when this happens. This will have an effect on the entire recording and processing of accounting information.

Loss of data

Since all the information is stored in one location, any unprecedented incidence might lead to the loss of this information.

Reduced human involvement

IT systems are independent and will work on complex business transactions within a short time. This limits the involvement of people. This has made it impossible to find any issues from the final statements. Many organizations have been forced to retrench some of the workers working in the audit department since some of the work they used to do is now being done by computers.

The manual accounting system allows one to closely follow the audit trail. The use of computerized accounting has made it impossible to follow the audit trail since some of the manual documents are converted into electronic files that are not easily visible.

Traditionally, authorization of transactions was a task reserved for two or three employees of the organization. However, with the introduction of IT systems to accounting, this task has been left to one person. This is usually left to an employee of the IT department.

If the accounting system is wrongly programmed, there will be errors in the final statements, because a computer is usually programmed and will perform functions as instructed. It might take some time before the errors are detected and the necessary corrections made. If this happens, the organization will be forced to perform the auditing process afresh.

Accounting systems become obsolete after some time. This will force the management to acquire a new accounting system. Operations of the business will be affected before the new system is installed and functions correctly.

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