6.1 Automated environment and relevance of IT in an audit

Question 1

Define automated environment

Answer 1

A business environment where the processes, operations, accounting and even decisions are carried by using computer systems - known as information systems or information technology environment

Question 2

Fundamental principle of an automated environment

Answer 2

Ability to carry out business with less manual intervention and more system driven

Question 3

Complexity of a business environment depends on

Answer 3

Level of automation
More automation more complex
Using integrated enterprise resource planning systems viz., SAP, Oracle
Off-the-shelf accounting software less automated thus less complex environment

Question 4

Key features of an automated environment

Answer 4

Enables faster business operations
Accuracy in data processing and computation
Ability to process large volumes of transactions
Integration between business operations
Better security and controls
Less prone to human errors
Provide latest information
Connectivity and networking capability

Question 5

Examples of non audit assurance engagements

Answer 5

Internal audits, IT audits, pre-implementation reviews, data migration audits, third party assurance