ABSTRACT
Investigating the effectiveness of information technology
(IT) Audit controls in financial institutions was worth researching, regarding
the increasing number of financial institutions resorting to computerization.
Thus, these institutions would primarily depend on IT audit controls that are
put in place to manage and guard the institutions’ overall business setup to
achieve the institutions’ business goals or objectives. The main objectives of
the research were to find out the kind of IT Audit Controls being used,
Controls’ weakness, its causes and effects and the recommendations needed to
ensure controls’ effectiveness. Sixteen computerized financial institutions
were sampled and the IT Controls used were studied. In spite of the successes
made by the computerized financial institutions, the sampled financial
institutions helplessly admitted to the dangers posed by other IT security
challenges. These IT security challenges were mainly as a result of internal
control weakness which potentially can bring the institutions down if not
checked. Considering the globalization of the computerized technology it was
recommended that the financial institutions in the country should employ more
of these IT Audit controls, especially Internet and E-Commerce Controls, Telecommunication
Controls and Database Controls in the day-to-day transactions. Also for optimum
effectiveness of these Controls, the computerized financial institutions should
also pay every price to strengthen the internal controls to safeguard against avoidable
IT Audit controls’ breaches and other potential security challenges that can
break down the financial institutions. Further research must be undertaken to
investigate the recent spate of global banking fraud on credit and debit cards
of customers who patronize electronic commerce.
CHAPTER ONE
INTRODUCTION
1.0 Background to the Study
The idea of Information Technology
(IT) Audit which has been in existence since the mid-1960s has metamorphically
undergone various stages, mainly due to unfolding discoveries made in the
technology and the integration of the technology into businesses (Rainer et
al., 2011).
Currently there are a lot of
companies that rely on the Information Technology (IT) for their day-to-day
operations; among such are Telecommunication companies, Banking institutions
and many others. For these organizations, IT plays big part of their day-to-day
activities including the employment of setup systems that are more dependable
to enhance the institutions’ activities and operations. The above, thus
underscores the fact that the application of IT in organizations, institutions,
companies, enterprises and the like is constantly increasing.
Information Technology (IT) Audit
which is also known as Information Systems (IS) Audit is the evaluation of
organizations’ daily transactions, activities, procedures, operations or setups
within an Information System infrastructure (Rainer et al., 2011). Thus the
primary function of an IT audit is to electronically examine to find out the
institutions’ capability to use Information Technology infrastructure to secure
its hard earned valuables or assets and also communicate and disseminate
information to appropriate people. In financial institutions these reviews are
done to evaluate whether IT based financial organizations are adhering to standard
accounting practices.
Information Technology (IT) Audits
are usually performed by IT Audit professionals with professional certification
from international organizations such as Institute of Internal
Auditors (IIA), Certified
Information System Auditor (CISA), just to mention a few (Rainer et al.,
2011).
1.1 Audit Controls
Audit Controls are usually institutions’
setups, mechanisms, frameworks and organizational structures which are used for
the inspection of the accounting procedures and records by a trained auditor to
eliminate or minimize dangers or losses to the organization. The Audit controls
seek to address two main objectives, such as achieving the institutions’ goal
and risks or losses which must be prevented (Kenneth, 2010).
“Without audit, no accountability;
without accountability, no controls; without controls, no efficiency; without
efficiency, no development” ( Daniel, 1999). This emphasizes the importance of
audit in every organization.
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