Information Systems Auditing

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Information Systems Auditing
Instructor Chris Westland, PhD, CPA Certified
Public Accountant (Texas License 17277)
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Todays Topics What is IS Auditing?

• Course Organization
• What is IS Auditing?
• Why is it Important?
• What is the Industry Structure?
• Attestation and Assurance
• Accounting Irregularities and Financial Fraud
  (Video)

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Schedule
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Logical Structure of the CourseWith Readings
from the Text
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Practicum (prak-ti-k?m) nounLessons in a
specialized field of study designed to give
students supervised practical application of
previously studied theory
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Preliminaries Evaluation

• http//teaching.ust.hk/ismt300t
• Chapter Spot Tests 50
• Midterm Examination 20
• Final Examination 20
• Class Participation 10

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What is Auditing?
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What is Auditing?Nature of work

• Accountants prepare, analyze, and verify
  financial reports and taxes,
• and furnish this information to individuals and
  managers in business, industry, and government
• The three major fields in accounting are
• Auditing
• Public Consulting
• Corporate / Internal

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Public Accounting

• Auditor An auditor examines an organization's
  financial statements, verifies the accuracy of
  the financial records, examines management
  procedures and internal controls to ensure
  accuracy, and checks for mismanagement, waste, or
  fraud.
• The auditor may review company operations
  compliance with corporate policies, laws, and
  government regulations. The auditor, or reports
  to investors and authorities such as the federal
  government that financial statements have been
  prepared and reported correctly.
• Other Public Public accountants perform
  accounting, auditing, tax, and consulting
  activities for public accounting firms, their own
  businesses, governments, nonprofit organizations,
  or individuals.
• Typically, accountants specialize in one aspect
  of accounting, concentrating on taxes or
  bankruptcies, for example. Some become
  consultants who offer advice on compensation,
  employee benefits, the design of accounting
  processing systems, or how to safeguard assets.

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Corporate / Internal

• Often called management, industrial, or corporate
  accountants, private accountants record and
  analyze financial information for the employer
  and prepare financial reports for stockholders,
  creditors, regulatory agencies, and tax
  authorities.
• Duties may include budgeting, performance
  evaluation, cost management, and asset
  management. An accountant also may work as part
  of an executive team in strategic planning or new
  product development.
• Entry-level private accountants often start as
  cost accountants, junior internal auditors, or as
  trainees for other accounting positions.

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Qualifications

• Auditors must have
• ability to analyze, compare, and interpret facts
  and figures quickly and be able sound judgments
  based on this information.
• should have good oral and written communication
  skills, well-developed interpersonal skills, and
• ability to work in cross-functional teams.
• Business systems and computer skills are
  required.
• Some employers prefer hiring individuals with a
  master's degree in accounting or a master's
  degree in business administration.
• Most want to hire someone who is familiar with
  computers and accounting and internal auditing
  software applications.
• Changing legislation regarding taxes, financial
  reporting standards, international competition,
  business investments, mergers, and other
  financial matters require accountants and
  auditors to continuously update their knowledge.

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CPAs

• Most accounting positions require at least a
  bachelor's degree in accounting or a related
  field.
• Based on recommendations made by the American
  Institute of Certified Public Accountants
  (AICPA), certified public accountant (CPA)
  candidates must complete 150 semester hours of
  college coursework an additional 30 hours
  beyond the usual four-year bachelor's degree to
  become licensed.
• CPA certificate applicants to have some
  accounting experience. Almost all states require
  a CPA and other public accountants to complete a
  minimum number of hours of continuing education
  before a license can be renewed.

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Employment Outlook

• Job opportunities for accountants are expected to
  grow 10 to 40 percent per year through 2006 due
  to the increasing number of new businesses
  spurred by Chinas growing economy.
• Jobs with major accounting and business firms
  remain the most sought after by new graduates.
• More jobs will be available replacing thousands
  of accountants and auditors who retire or
  transfer to other occupations each year.
• Accountants and auditors who have earned
  certification or licensure or who have advanced
  degrees will have the best job prospects.

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(Where Do Information Systems Fit in?)Compare
an Accounting Department in the early 1900s
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(Where Do Information Systems Fit in?)With an
Accounting Department in the 1970s
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(Where Do Information Systems Fit in?)With an
Accounting Department Today (well not
everywhere, but you see the potential.)
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(Where Do Information Systems Fit in?)With an
Accounting Department of 2020 ( at least my
prediction.)