System and Auditing Audits
System and Auditing Audits
This article discusses three types of controls and how each type can be examined in a System and Organization audit. The first is the general control, which is probably the least understood and most often ignored by companies. A General control is designed to provide an overview of how the Company operates. Generally, this includes all personnel, all departments, and all functions that impact the overall performance of the Company.
A departmental control is designed to identify the functions performed by individual department members. Typically, a large Corporation has many departments. However, a small Corporation may have only one department responsible for a particular function. The departmental controls will track the functions of the departments to determine if they are consistently performing their functions in a timely and reliable manner. In addition, the SOC 1 compliance will examine whether the functions are meeting performance goals and objectives.
The third type of control is a unit control. This is probably the most complex form of control and is usually implemented at the executive level. In this type of audit, the Company is divided into units or parts and then these parts are monitored and recorded. Detailed reports are then compiled to evaluate the performance of the organizational units. Normally, this type of audit focuses on the most troublesome department or piece within the company.
Although all three types of system and organization audits are designed to provide important information about the operations of a Company, the actual frequency of reviewing and testing will depend on several factors. These include the size, number, and scope of the system, the period of time the system is used, and the level of training and education provided to employees who use the system. The cost of a particular system and organization control audit will also vary with the type, size, and scope of the components being tested. Finally, the time it takes to create a thorough report will also depend on the complexity of the system under review.
System and organization audits can be conducted by personnel in the various divisions of the Company, such as the accounting, Finance, and Management groups. Specialized consultants may also be called in for specific types of system and audit engagements. However, management should keep in mind that the entire process should be well led by the CEO or General Manager of the Company. Doing so will ensure that the audit findings are not skewed because of personal relationships among those conducting the audit.
The primary goal of a system and 401k audit is to provide reliable indicators and measures for improving internal controls and accountability for the overall health of the Company. Because the purpose of an audit is to make the Company more aware of its key performance indicators, the results of the audit should provide important insights that can be used to improve the performance of the Company.
If the audit provides negative findings, it should be used as a tool to identify corrective actions and strengthen the organizational controls. The Company should conduct regular audits of its key controls to identify areas of risk that require additional management attention. The effectiveness of the controls can be further improved when they are properly aligned with the objectives of the Company..Check out this post for more details related to this article: https://en.wikipedia.org/wiki/Audit .