Free «Systems Audit-Kudler Fine Foods» Essay Sample

Systems audit refers to evaluation and assessment of any given system. A system may be a computer system, an accounting system, production process or manufacturing line in an automobile firm. The objective of performing a system audit is to come up with an opinion of the system under review on the basis of the carried test or examination (Akinyemi, 2007). In businesses, auditing of accounting systems is performed to determine the reliability and validity of accounting information. Due to accountancy principles and standards, auditing seeks to provide reasonable assurance that the financial statements are free from error and bias. Kudler Fine Foods required thorough and detailed audit of its systems in order to enable it remain competitive in the market. The major system audits that it would undertake include: information systems audit, financial audit and operational audit.

Information systems audit, also known as automated data processing audits, will involve examination of management controls of Information Technology (IT). It will ensure safety and security of information, data integrity and effective operation of the IT system within the organization. An efficient and effective audit system will guarantee proper management of IT and organization’s resources. Its main purpose will involve evaluation of internal control design and effectiveness of the IT. The IT audit will make certain smooth flow of communication between the clients and the organization. Auditing of the IT system will engage planning, studying, evaluating and testing controls, developing reports and carrying out follow-ups.

Financial auditing will require verification of the financial statements of the entity with a view of expressing an audit opinion. It aims at providing reasonable assurance that the financial statements have been presented in a fair manner, with all aspects true and represented in accordance with the financial reporting framework. In Kudler Fine Foods, financial audits will help improve the degree of confidence of users of its financial statements. Financial auditing mainly concerns the organization’s fiscal position and performance. It will as well involve assessing financial risks that Kudler Fine Foods may face and possibility of application of computerized accountancy systems. It will also measure the company’s financial performance. This is because financial auditing helps in presenting an accurate account of a company’s results that can be relied upon by the shareholder and ease documentation of transactions such as invoices.

Operational auditing, on the other hand, entails identification of ways and methods of improving effectiveness and efficiency of the production by assessing its procedures and systems. The internal control systems will evaluate the operational effectiveness of the system, for example, its ability to effectively authorize transactions, capacity to reconcile accounts, and ability to comply reports regarding the company’s finances. Auditing of operations system must ensure that adequate controls exist, for instance, to ensure security on online transactions and control of unauthorized access through password and protocols validation

Operational auditing will ensure that all customer accounts do not contain material defects or deficiencies and that the transactions upon which the accounts are based abide by the decisions and intentions of Kudler Fine Foods. Operational auditing will be tasked with systems study and review, assessment of internal controls, substantive testing of data and reporting of findings. Operational auditing inspects all aspects of the entire organization and entails establishing performance objectives and standards, evaluation of achieved performance against targeted goals within the competitive environment (Champlain, 2003).

In conclusion, the management of Kudler Fine Foods must fully recognize the impact of advance technology on its operations. It should carry out detailed auditing of its systems before venturing into business. The new system should be fully utilized in collecting, processing, analyzing and reporting of useful information within the organization.


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