How The Internal Check System Performed In A Company Assist The Auditor?
The whole procedure of internal check initiated in a business firm is quite important for the auditor as an effective internal check scheme makes the job of an auditor easy. This is because the regular and detailed evaluation of business transactions are already examined in the internal checking and so, the natural errors are almost under control. But if otherwise, the internal checking is not properly done, then the auditor has to reconsider the depth of examination that needs to be undertaken to satisfy himself about the legitimacy of the business accounts and documents.
Thus, the auditor requires to analyze the system in detail and can opt to try it with test checks and further, if the results are seen satisfactory, then he can proceed to depend on this scheme. Else, he can suggest changes that can strengthen the internal checking strategy.
Internal Check Vs Internal Control
- The real essence.
- The internal check system includes allotting the responsibility or distribution of work among the company officials where work done by one person is gradually and continuously checked by another of the same company. Hence, it forms a measure of internal control.
- Whereas the internal control system is employed by the management for the efficient working of the organization adhering to the management policies and thereby its securities are assured and records are true and comprehensive. Thus, it is a combination of both the internal check and the internal audit.
- The main function.
- For internal check, it is the matter of regular transaction record keeping along with effective clerical duties.
- In the internal control context, both the functions of the internal check as well as audit needs to be done.
The features of an EDP audit
An EDP is an audit type operated in the computer system. Presently, almost all the information is stored in the digital database and an auditor requires to evaluate it for the effectual audit process. An adequate internal check is also necessary for this storage of account data. The strategies employed by the auditor in evaluating this accounting system like nature, schedule or so also varies depending on the EDP environment.
However, the primary purpose of the EDP audit is to ensure whether the computer network preserves the data integrity, manages to keep up the organizational goals and use the company resources efficiently. All these are to be maintained within the scope of the audit itself.