The Importance of IT Audits

Information systems form the basis of business processes today and the controls to be made on the processes are realized with the help of technology.

If processes and controls are not in place, there is a possibility of producing incomplete, incorrect, and invalid data.

The increasing importance of the use of information systems in business life has brought the subject of IT auditing to the fore. The main purpose here is to determine that the IT controls, which constitute a critical component of the organization's internal control system, are effective, sufficient, and compatible.

Evaluation of software and hardware used in institutions, information system processes, information system processes used in the production of financial data, and related internal controls has become a legal requirement by local and international regulatory institutions.

IT audit is a critical issue in terms of ensuring their corporate sustainability, beyond a legal obligation for all businesses whose financial and non-financial data and information are processed and stored electronically.

In this blog, we'll explore:

1. What is IT Audit?
2. Why is IT Audit Important?
3. What are the Benefits of IT Audit?

What is IT Audit?

Information technology (IT) audit is an audit of the information technology systems of a business or organization, the management and operations of the systems, and the processes associated with them.

IT audit;

• can be made mandatory upon the request of the regulatory authority or
• can be made optionally.

Today, since the accounting recording systems of many businesses are made through computers to a high degree in the services and operations they provide, there is a need to make IT controls and examine the systems and processes while the independent audit of the business is carried out.

The using purposes of IT audit can be listed as follows:

• Evaluation of the reliability of data from IT systems that have an impact on the financial statements of businesses
• Determining the level of compliance with currently applicable laws, policies, and standards regarding IT.
• Detection and control of inefficiency as a result of unnecessary and excessive practices in the use and management of IT systems.

Why is IT Audit Important?

Many businesses spend huge amounts of money on information technologies. For example, it is known by everyone how much the technological investment of a medium-sized enterprise in an ERP system and the cost of the service received thereafter are costly. For this reason, IT systems must be reliable, but also secure, not vulnerable to potential technological attacks.

IT auditing is important. Because audit assures that IT systems are adequately protected, provide reliable information to decision-makers and information users, and are appropriately managed to achieve their intended benefits.

In businesses, most users rely on information technology without knowing how computers work and how their algorithms are. But a computer error can be repeated indefinitely and cause far more damage than human error.

IT auditing also helps mitigate risks such as data destruction, tampering, system leaks, outages, and mismanagement of IT systems.

What are the Benefits of IT Audit?

It is possible to talk about certain benefits in general for the audit activities to be carried out in the field of information technologies, but evaluating these benefits sectorally will make the situation much easier to understand. Accordingly, the following specific benefits can be expected with IT auditing in the following industries:

IT Auditing for Financial Sector

For the financial sector that is using tightly regulated IT systems, which have both an impact on financial results and a large amount of personal information, assurance can be provided on the following issues:

Regulatory Compliance: Developing the organizational structures necessary for regulatory compliance within institutions should establish the necessary processes for IT and information security governance.

Continuity of Services: Necessary investments should be made, processes should be developed and personnel should be trained in order to provide financial services uninterruptedly or within the stipulated time.

Protection of Personal Information Security and Corporate Reputation: Determination of data classes and implementation of necessary access controls, encryption controls, log management controls throughout the data lifecycle should be performed.

Protection of Financial Assets Against Attackers: With robustly designed security architectures of critical infrastructures, servers, and applications open to dangerous networks, corporate and customer financial assets should be protected.

IT Auditing for Telecom Sector

The regulatory climate is similar to the financial sector as the sensitivity of the personal data it produces and processes are quite high. Therefore, the need for confidentiality and continuity holds utmost importance for the telecom sector. For these reasons, there is a high need for assurance for this sensitive sector in the following areas:

Security of Customer Traffic Information and Compliance with Regulations: Taking the necessary precautions to protect the customer traffic and communication content, which is sectorally critical, and implementing the necessary management systems and processes.

Keeping Customer CRM Information Out of the Hands of Competitors: Preventing the leakage of customer CRM (product, package, location, profile) information from within the organization and monitoring leaks through IT systems opened to dealers, business partners, and customers for this sector where competition is at a high level.

Service Continuity: Keeping service continuity at the highest possible level by making the necessary infrastructure investments and developing processes.

Safe Adaptation of New Technologies: Making necessary risk analyzes and taking precautions against security breaches in the telecom industry, which is an early adaptor in new technologies emerging day by day.

IT Auditing for Retail Sector

Food, technology, clothing, etc. Reducing stock costs and effective use of decision support systems gain importance as a result of effective use of IT resources rather than information security for the retail sector operating in these areas. Accordingly, there is a need for assurance in the following matters primarily in this sector:

Effective IT Project Management and Ability to Deliver IT Solutions: Whether the organization has an IT management that can meet its business needs, whether the software development process is running smoothly.

Finding Adequate Decision Support Systems: Providing environments where cost and other data are collected and analyzed with the necessary tools to ensure the necessary optimizations.

Credit Card Information Security: Whether risks associated with credit card payments are avoided or addressed.

Apart from these, important hygiene rules in terms of IT organizations and processes (eg, incident management, change management, backup, logging, capacity, and performance monitoring processes, etc.) can be reviewed to provide assurance regarding the healthy performance of IT services.

To conclude, IT auditing is an important assurance tool for both foreseeing and determining IT risks, which is a quite sensitive business risk. It is a type of audit that is absolutely needed in all companies and sectors where the use of information technologies is important. In addition, IT auditing is an indispensable tool in terms of managing risks related to suppliers and business partners with which information sharing is high.