What is Information technology Audit?
IT audit refers to the process of evaluating an organization's information technology infrastructure, policies, procedures, and operations to ensure they are aligned with the organization's objectives and goals and are compliant with relevant laws and regulations.
An IT audit typically involves a thorough examination of an organization's hardware, software, networks, databases, security systems, and other related components to identify potential risks and vulnerabilities that could impact the confidentiality, integrity, and availability of its information assets.
Further an IT audit also looks at whether the existing security measures that are in place to safeguard the organization’s digital assets are adequate or not. Based on the results of the security audit, an organization can take the necessary steps required to bring about any corrective measures that are required; this helps to improve the IT system of the business, which naturally leads to better performance and enhanced security.
Information System Audit Procedure
As we aware timely and effective Internal audit of Information systems at periodical intervals will be an important control point to identify existing or potential IT risks. It is better to have an awareness about audit procedure. It includes detailed report on below aspects.
How IT audit can help mitigate risks
IT audit helps organizations by identifying and mitigating IT-related risks, ensuring compliance, enhancing operational efficiency, and promoting data integrity. It also assists in strengthening cybersecurity, managing third-party risks, and optimizing costs. By providing insights for strategic planning and improving decision-making, IT audits create value for the organization.
What IT audit services can chartered accountants offer to address organizations' IT-related requirements?
Chartered accountants can offer a range of IT audit services, including financial systems audits, compliance assessments, cybersecurity evaluations, risk management, data integrity checks, and strategic IT alignment, among others, to help organizations effectively manage their IT environments.
Recent Breaches and Failures
1. Upstox – Password data breach (2021)
Upstox, a leading online trading platform in India, experienced a data breach affecting customer contact and KYC details. While the breach was limited, it underscores the importance of enhancing cybersecurity measures, particularly for third-party data warehouses.
2. India Healthcare website – Data Steal (2019)
A US-based cybersecurity firm revealed that hackers stole over 68 lakh patient and doctor records from a prominent India-based healthcare website. This incident emphasizes the growing threat to sensitive medical data and the need for robust defenses against cybercriminals.
3. Amazon Web Services Outage (2017):
Amazon Web Services suffered a significant outage due to human error during routine maintenance. This event serves as a reminder of the interconnectedness of digital services and the necessity of well-executed maintenance procedures.
4. British Airways IT Outage (2017):
British Airways experienced a prolonged IT outage that resulted in flight cancellations and passenger disruptions. The incident highlights the potential impact of technology failures on critical operations and customer experience.
IT Risks – Impacts – Control Measures
As the information system brings forth the fresh style in which companies interact and the organization is structured. It enhances the company's core competencies and lowering the cost of communication and coordination between the supply chains lay forward a different approach for effective information communication. In today’s time, success of an organisation is highly dependent on its ability to deploy effective, secured and robust IT system, otherwise the business will go disrupted.
As we know, identifying, assessing, and implementing controls to IT Risks is an integral part of IS Audit herein below provided few of major Risks associated with IT, consequences there on and controls to mitigate those IT risks.
| S.No | Risk | Impact or consequences | How to mitigate? |
|---|---|---|---|
| Risks associated with data | |||
| 1 | Data Quality Risk: It refers to the inaccuracy, incompleteness, and inconsistency of data |
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| 2 | Data Processing Risk: Inaccuracy in data processing by system software application |
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| 3 | Data Loss/Breach: Sensitive data can be stolen or accessed, may lost due to hardware failure, software bugs, human error, environmental disasters |
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| Physical Risks to Information System | |||
| 4 | IT Assets Misappropriation: It refers to unauthorised utilisation for personal benefit or stealing of IT assets |
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| 5 | Environmental Risks: Environmental factors, such as temperature, humidity, and dust, earthquakes, floods, hurricanes, and fires can damage Information systems |
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| System Security Risk | |||
| 6 | Malware is a type of malicious software that can cause a wide range of risks to your computer system, |
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Disclaimer:
“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”
Prepared On:
17/10/23
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