We have a dedicated subject for this - Information Systems Control & Audit. Paper 6 to be specific.Thats what i tol - Accounting systems are all within Systems. U dont have manual accounting as in past. The scenario has totally changed.The methods for:1) Collecting Evidence2) Conducting Actual AuditHave totally changed today.When collecting evidence, we used to rely on manual signatures as authorisations on transactions. But what happens today?a) Interest/Depreciation etc. are automated transactions. How do believe that these have been Authorised by a responsible person? Even if properly authorised, then also, who actually set the percentages, periodicity of these transactions and all?b) The other transactions that occur - Customers/Suppliers directly interact with the Client via Internet. Now how do we establish reliability of such transactions?Coz in those cases, u dont have any Purchase/Sales Orders, any proforma Invoices, any final Invoices, any Delivery Challans etc........all u have is - an entry in the system that particular item sold to particular person. Who knows if its fake or real?Then there are other legal aspects & Managerial control aspects, like certain amount of cash should not be transacted in, or a higher level authority only is authorised to do a particular transaction, etc. How to track these??Then there are things like frauds taking place due to manipulation of source codes of the Accounting systems. What controls do they place to avoid it? What controls do they have in case a disaster strikes & their Information assets are threatened?Also, when a program is wrongly coded, then it will continuously process a particular transaction wrongly. That hugely impacts the overall financial statements, especially if large no. of such transactions are done, & the Management chooses to stay silent or whatever.And this, is just the direct part. There are firms that do not maintain their own books. They outsource this task to other organisations. In such cases how the whole process is handled, then what is the reliability of the organisation doing the actual accounting work, etc.........Now 1 practical example - CA firms enroll with the ICAI for auditing Bank branches. In those enrolment forms they specifically ask that whether any employee or partner in the firm has the degree of ISA or CISA? I am serious, i have seen that form when i was doing my Articleship.In short this field has become an important part in our Profession. In the above explanations, i just talked about Statutory Audit part. I have totally ignored Taxation, Internal Audit, Management & Operational Audit, Compilation Arrangements, etc.
