Information Technology Auditing And Assurance Essay


Discuss about the Information Technology Auditing and Assurance.



Auditing tends to be perceived as an on-site verification process where an examination or inspection process is conducted to ensure there is compliance to the set requirements. Auditing is mostly known to be applied across the whole organization and sometimes it might serve purposes such as functioning, processing as well as the production process. The IS0:19011:2011 auditing guidelines indicate that it’s a systematic independent and documented process where auditing evidence is obtained, recorded and set to further verification so as to determine its relevance to the organization (Silove, 2014). Several audit methods are used in the attainment of auditing purpose. Auditing is commonly known for its three discrete types which include; product, process an system, but for documenting the audit it reviews, it is perceived as an independent or supports the three general types of audit. Audits are named based on their purpose or scope. Therefore, auditing at times is related to the management interest which focuses on the assessment of the area performance or even efficiency.

The largest share of criticism and blame for current overall financial crisis has focused on dealing with a record establishments' structures, financial controllers and overall cash related illustrating. (Gay & Simnett, 2012) But numerous people handed the blame against the analysts over light of the way that while the sparing cash dissatisfactions have inflicted significant damage millions people's life supports and trusts; it makes the feeling that the assessing calling, especially the "Colossal Four", has had "an extraordinary crisis" in the midst of such a horrifying time (Louwers, 2005). Hence, the extent of inspecting charges and the folds of cash related organization have raised issues about evaluators' accommodation and master ethics. Regardless, I battle that monitors can't be only reproached for the cash related crisis, as the obligation lies moreover on clerks, chiefs, board people, money related authorities and distinctive accomplices. In as for current overall budgetary crisis, I believe the best way to deal with keep this from happening again is let the controllers to accept organize obligation for assessing banks and cash related foundations (Hall, 2000), then appreciate the current "Colossal Four" reviewing market condition.

No one suspects that auditors will guarantee the survival of any association, yet inspectors are required to be self-ruling of the associations that they audit and practice sensible care and capacity. The analyzing business likes to balance surveys with a prosperity check. A tolerable expert takes the patient's pulse, temperature, listens to beat, looks for symptoms of issues and makes request about eating schedule, lifestyle, and history. Nevertheless, the current corporate folds from wherever all through the world have changed people's feeling about checking on. On various events it has been shown that the basic survey model is broken since Enron. (Ricchiute, 2013) The monitor's part is not to predict the future yet rather to ensure that associations' cash related verbalizations give a real and sensible point of view of the previous 12 months execution. What's more, commentators work focuses on vital data, not the estimation of preferences which depends on upon the figure of future events. So should a monitor examine the estimate of future events of the association? By then we may require another name for assessor. Should evaluators be working more personally with sheets, proprietors of associations? By then how to keep the hostile condition? Thus, analysts can't be solely censured for the present cash related crisis, as the commitment lies furthermore on accountants, boss, board people, budgetary masters and distinctive accomplices.

With this in mind, perhaps it would be important to at least try and discuss some of the liability that auditors may face as a result of their conducts in their practice.

Liability for being liable-Once in a while evaluator accuses the officers of the relationship in his review report. His report ought to be such sort that it may not affront or disrespect any individual. Obviously if the report of the analyst harms the supportive mindset and notoriety of any individual then he will be seen as cautious on the grounds of the feedback. Controller is not at danger (Ricchiute, 2013).

In the event that the information depends on upon affirmations review report is viewed as a novel document. It ought to contain only feelings generally controller will be seen as attempted and genuine. Analyst's report ought to contain the running with qualities; it doesn't miss express the truths, it is not prompted destructiveness, it doesn't go past what is relevant to its subject, declaration ought to be bonafide.

Liability as a result of negligence-Trustworthiness and perseverance. Subsequently, if an inspector is found with any demonstration of carelessness in execution of his obligations, he might be sued in the common courts for harms coming about to monetary emergency. Carelessness risk emerges in the occurrence where an evaluator gets to be distinctly careless in the examination of bookkeeping books. The evaluator should likewise be held at risk in the event that he can't recognize any type of redirections or neglects to find any types of blunder which should be found (Kumar Basu Sanjib, 2016). Consequently, he is implied to have bombed in practicing a sensible care and expertise when playing out his obligations. Underneath, we will demonstrate the risk that reviewers confront on account of carelessness.

Liability on account of misfortune inspectors won't be held at risk to remuneration if no misfortune is endured by the customer regardless of the possibility that the examiner has demonstrated careless. Yet, in the event that misfortunes are accessible for the customer there will be remuneration accomplished for the misfortune experienced by the customer.

Taking a gander at a case, the Ufanis Estate Building Society versus the Stantors 1987. Here, reviewers couldn't have cared less to watch the arrangements completed articles. Benefits were swelled by means of the incorporation of invented terms. Subsequently of carelessness profits were paid out of capital. The organization made a move and sued the inspecting firm for the harms acquired (Ricchiute, 2013). On the off chance that such dishonest acts advance in some firm, it implies that may heighten the levels of monetary emergency all inclusive. Subsequently, to keep away from the acceleration of such acts examiners are held obligated therefore of their careless demonstration.

Liability to the honorary auditors- Liabilities of paid and supported pundits are same. If there should be an occasion of lack of caution or misfeasance unique auditor can't mitigate himself from the risk. In the event that the remissness is displayed then overseer will be seen as cautious and he has no inspiration to express that he is not being paid or enduring less total (Robertson et al, 2002).

Liability for Misfeasance acts- The term misfeasance alludes to rupture of obligation or break of trust which includes the organization which has endured misfortunes. In this way, the organization may sue the reviewers accordingly of their standard suit on account of misfeasance. Subsequently, organizations can guarantee harms coming about because of the misfortune they have endured. Misfeasing continuing have a tendency to be taken against bite the dust examiners by the chiefs (Reffett, 2000). Promoters, overseeing specialists show up when an organization is in liquidation. In many example, the misfeasance obligation happens in occurrences where an organization is twisting up. In this manner, if such acts continue advancing it could prompt to worldwide budgetary emergency that is the reason reviewers are held at risk on such acts to keep away from the money related emergency.

Liability to third parties- Reporter has no simultaneousness with the outcasts. He is not utilized by the untouchable so he has no dedication to them. Nonetheless, the reality of the situation is that as the records are examined by the review, pariah may in like way watch the report, untouchable depend the report without the further request. For instance bank just review the guaranteed accounting report and attributes the cash to the affiliation (Ainapure, 2009). Charge division and others in addition depend on upon the surveyed illuminations. "Before long the question is that whether the examiner is at risk on the off chance that they depend on upon the records guaranteed by him and continued on through a fiasco should he repay the set back?

Answer is that in taking after cases he will be talented to the outcast which includes; on the off chance that the presentation set apart by the evaluator was not ensured debase, it was known to the examiner that presentation was not ensured ruin, outsider drove forward through a hardship by depending upon the statement of evaluator, on the off chance that the presentation was made with the target that the other party ought to make up for lost time with it and on the off chance that expert gave his assent for the possibility of such illuminations in the outline (Robertson et al, 2002).

In light of the above dialog, in the event that we could relate the examiner's obligation with Lehman's Brother holding breakdown. We could respects that a portion of the reviewers risk which Ernst and Young firm was discovered blameworthy of incorporate; the obligation of privileged inspectors where the examining firm gave gigantic bookkeeping misrepresentation which was considered as a lack of regard act by the firm. Moreover, the inspecting firm was likewise at risk for carelessness, inner impact which alludes to obligation and risk to outsider (Louwers, 2005). Since, Ernst and Young firm were held blameworthy of these unscrupulous behaviors of misrepresentation. They were held subject of the misfortunes which open financial specialists endured totaling to $10 million which went about as security for Lehman.

Taking a gander at the above exchange, it's obvious that as an evaluator you ought to act in a moral way in order to maintain a strategic distance from cases of being held obligated. Beneath, we will give a portion of the ways which an auditor or examining firm can work in administration of its introduction to obligation.

There are a couple ways which firms could use in organization of first experience with instances of remissness acts. The most clear being not acting thoughtlessly. In down to business terms, this suggests applying the worldwide gages of inspecting and furthermore the code of ethics as indicated by capable accounting laws, and giving cautious thought to the terms and courses of action which are settled upon in the engagement letter (Arens et al, 2017).

Likewise, improving in quality controls appeared differently in relation to the present levels can't happen without the venture of audit firms. Thusly, with the weight to diminish the assessing costs, it tends to be doubtful that associations need to present also augments in cost unless there is whole deal diminishments in legal and insurance costs. In this way, it's up to the survey firm to keep up most outrageous respectability to the extent audit quality.

Disclaimer of commitment

One of the outcomes ascending out of the Lehman's case was that of potential acquaintance of examiners with suit from the untouchables to whom they never revoked chance. Along these lines, it got the opportunity to be particularly consistent to join a disclaimer of hazard to untouchables in wording of the audit report. Consequently, disclaimers may not totally go out on a limb to outcasts yet rather they tend to reduce degree of courts supposition to commitment on the analyst (Louwers, 2005). In spite of the way that the disclaimer component is much of the time done in the UK, such a component thought may seem to have some importance to the inspectors as to the issue of being held subject.

Commitment to obstruction when making assentions

Since 2008 examiners have been allowed under the term of Companies Act to use the Liability imprisonment understandings to diminish the threats of suit which begins from clients. LLAs tend to be explanations which depend on terms of engagement to compel best on the total compensation that can be searched for from the analyst (Silove, 2014). Thus, shareholders ought to reliably support this consistently and should be kept up by the judges as sensible and sensible when a case rises.

Furthermore, the demonstration of creating terms and conditions by a review firm may end up being an incredible test. Consequently, this might be seen as a boundary to prosecution by the evaluator in light of the fact that the shareholders may neglect to concur with the set conditions (Hall et al, 2005). In this manner, it is prescribed for one to consider giving quality reviews.


In conclusion, this paper has a tendency to give a top to bottom investigation of auditor’s risk. A portion of the liabilities that auditors confront incorporate; carelessness, misfeasance, criminal risk, privileged examining and obligation to outsider. The paper additionally takes a gander at a portion of the effective courses that as evaluators or inspecting firms could use to diminish the levels of risk when a case rises (Doralt et al, 2008). Along these lines, it would be prudent for inspector to consider the proposals gave as it might have a critical part in their everyday parts. Also, auditors can't be exclusively reprimanded for the current money related emergency since initially, the examiner's part is not to foresee the future but rather to guarantee that organizations' budgetary explanations give a genuine and reasonable perspective of the past 12 months execution. Second, examiner's freedom and reviewer's expense reliance are not totally unrelated. All the more vitally, there is considerable observational confirmation demonstrating that the reviewing expense got by the auditor does not really hinder the examiner's freedom (Bologna & Shaw, 2010). The current monetary emergency has demonstrated that the current reviewing model for banks and budgetary organizations is broken; this was even clear review disappointments since Enron, HIH and various different outrages. In this manner it is the ideal opportunity for the controllers to assume coordinate liability for inspecting banks and money related foundations, since it is difficult to trust that the private firms could complete an open premium capacity. In the interim, the current "Enormous Four" examining firms' "too huge to fall" circumstance must be settled as it is representing a colossal deterrent to the administrations' change (Ross, 2009). Obviously, the legislature may not effortlessly change the review showcase just by separating them. In any case, it could at any rate expel them from the review of banks and budgetary organizations and delegate the errand to a committed controller.


Hall, J. A. (2000). Information systems auditing and assurance. Cincinnati, Ohio, South Western College.

Robertson, J. C., Louwers, T. J., & Robertson, J. C. (2002). Auditing and assurance services. Boston, McGraw-Hill.

Arens, A. A., Elder, R. J., Beasley, M. S., & Arens, A. A. (2017). Auditing and assurance services.

Ainapure, V., & Ainapure, M. (2009). Auditing and assurance.

Kumar Basu Sanjib. (2016). Auditing and Assurance. Pearson India.

Ricchiute, D. N. (2013). Auditing and assurance services. Mason, Ohio, South-Western/Thomson Learning.

Gay, G. E., & Simnett, R. (2012). Auditing and assurance services in Australia. North Ryde, N.S.W., McGraw-Hill Education.

Hall, J. A., Singleton, T., & Hall, J. A. (2005). Information technology auditing and assurance. Mason, Ohio, Thomson/South-Western.

Louwers, T. J. (2005). Auditing and assurance services. New York, McGraw-Hill.

Arens, A. A., Elder, R. J., & Beasley, M. S. (2006). Auditing and assurance services: an integrated approach. Upper Saddle River, N.J., Pearson Prentice Hall.

Reffett, A. (2000). Can identifying and investigating fraud risks increase auditors' liability? Champaign, University of Illinois at Urbana-Champaign.

Doralt, W., Hellgardt, A., & Hopt, K. J. (2008). Auditors' liability and its impact on the European financial markets. Cambridge Law Journal. 67, 62-68.

Ross, A. (2009). Negligence: should auditors have limited liability? [Wagga Wagga, N.S.W.], Charles Sturt University.

Bologna, J., & Shaw, P. (2010). Avoiding cyberfraud in small businesses: what auditors and owners need to know. New York, Wiley.

Silove, J. (2014). Auditors' liability. ACCOUNTANCY (SA)|SA Rekeningkunde. April, 4-6.

How to cite this essay: