By Stanley Opara

Monday, 3 Jan 2011

High-quality financial audits will significantly reduce the risk of investors and creditors using poor-quality information when making a variety of investment decisions, the General Manager, United Bank for Africa Plc, Mr. David Isiavwe, has said.

Isiavwe, according to a statement made available to our correspondent on Thursday, said this during the Information System Audit and Control Association workshop in Lagos.

He said financial statement audits for major corporations were indispensable to the functioning of national securities markets and the entire economy.

Isiavwe noted that many lenders and creditors also relied on financial statement audits to obtain assurance about the reliability of information used to support lending decisions.

According to him, a financial statement audit involves obtaining and evaluating evidence about an entity‘s presentation of its financial position, results of operations and cash flows for the purpose of expressing an opinion on whether they are presented fairly in conformity with established criteria.

He explained that the advent of information technology in auditing marked the beginning of a new dispensation in audit practice as it revolutionised traditional audit practices of ticking and casting. He added that it redefined the entire frontiers of auditing, especially in the area of ensuring the availability, integrity and confidentiality of information.

Stressing the importance of information systems audit to corporations, the banker noted that IS audit was the new appellation for Electronic Data Processing audit.

The purpose of IS audit, he explained, was to review and provide feedback, assurances and suggestions under broad headlines like confidentiality, integrity and availability.

Confidentiality, he said, covered ”attempts to prevent intentional or unintentional unauthorised disclosure of a company‘s information asset.”

The concept of integrity, he added, ensured that ”modifications are not made to data by unauthorised personnel or processes; unauthorised modifications are not made to data by authorised personnel or processes; and the data is internally and externally consistent.”

On availability, he explained, “Availability ensures reliable and timely access to data or computing resources by authorised personnel; it guarantees that the systems are up and running when needed; and guarantees the security practitioners that security services are in working order.”

Isiavwe, however, said for the foreseeable future, integrity would be a major competitive advantage, if not an absolute requirement.

”Competition is fierce today in almost every industry, and it will just get tougher, especially as developing countries are fully included in the global economy,” he said.

Source: Punch