Topics: Internal control, Auditing, Internal audit Pages: 7 (1941 words) Published: November 11, 2013

Information technology (IT) is the application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data, often in the context of a business or other enterprise. The term is commonly used as a synonym for computers and computer networks, but it also encompasses other information distribution technologies such as television and telephones. Several industries are associated with information technology, such as computer hardware, software, electronics,semiconductors, internet, telecom equipment, e-commerce and computer services. In a business context, the Information Technology Association of America has defined information technology as "the study, design, development, application, implementation, support or management of computer-based information systems". The responsibilities of those working in the field include network administration, software development and installation, and the planning and management of an organisation's technology life cycle, by which hardware and software is maintained, upgraded, and replaced. Humans have been storing, retrieving, manipulating and communicating information since the Sumeriansin Mesopotamia developed writing in about 3000 BC, but the term "information technology" in its modern sense first appeared in a 1958 article published in the Harvard Business Review; authors Harold J. Leavitt and Thomas L. Whisler commented that "the new technology does not yet have a single established name. We shall call it information technology (IT)." Based on the storage and processing technologies employed, it is possible to distinguish four distinct phases of IT development: pre-mechanical (3000 BC – 1450 AD), mechanical (1450–1840), electromechanical (1840–1940) and electronic (1940–present).This article focuses on the most recent period (electronic), which began in about 1940. Internal audits are designed to evaluate the effectiveness of an operation's internal controls by first gathering information about how a unit operates, identifying points at which errors or inefficiencies are possible, and identifying system controls designed to prevent or detect such occurrences. Then, they test the application and performance of those controls to assess how well they work. Managers ought to routinely evaluate controls in their department's operations by following the same process. Computers and networks provide most of the information needed for auditing. In order to be effective, auditors must use the computer as an auditing tool, audit automated systems and data, understand the business purposes for the systems, and understand the environment in which the systems operate. The other important uses for computers and networks by auditors are in audit administration. By seeking new uses for computers and communications, auditors improve their ability to review systems and information and manage their activities more effectively. Automated tools allow auditors to increase individual productivity and that of the audit function. By recognizing the importance of emerging environment and requirement to perform audit task effectively, auditors must recognize the key reasons to use audit tools and software, which will be further explored, in later section. The key reasons include: (i) On a personal level, learn a new skill.

(ii) Improve company decision-making using improved data.
(iii) Increase the efficiency of an audit.
(iv) Reduce routine tasks to provide more time for creative and business analysis. (v) Provide improved transparency governance of the organization. (vi) Identify quantitative root causes for issues.

(vii) Reduce fraud and abuse.
(viii) Identify savings in supplier, customer, human resource, computer, and enterprise management. This write up provides a brief analysis of the main areas where software tools are used...

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