Essay on "Auditing the Role of Databases"

Essay 16 pages (5292 words) Sources: 1

[EXCERPT] . . . .

Auditing

The role of databases in the auditing function is to analyze a much larger volume of information more quickly and accurately than what has been done in the past (Cascarino, 2012). That role is important because manual systems were far less reliable than systems that utilize computers, and those old systems could cause auditors to easily make mistakes that they would not otherwise have made. Now, there are fewer mistakes because of the databases. Companies can get their auditing needs addressed more quickly, as well, and auditors are able to do more work in a shorter period of time (Cascarino, 2012). Both privacy and security are parts of the database role, as well (Cascarino, 2012). Manual systems were more prone to being examined by those who did not have business looking at them, and it was harder for the auditors and the company to protect privileged information. Databases can lock information down much tighter, reducing the chance that the information on the database will be seen by someone who should not be viewing it.

Declarative Definition Language is also used, and its role in the ability to describe security specifications is significant (Cascarino, 2012). Specifications are made more clear by using DDL, and that ensures that the environment is audited more easily (Cascarino, 2012). The controls that are part of the original application can be migrated over to the environment through DDL, thus not changing anything while still protecting all of it (Cascarino, 2012). In short, DDL and databases make things much safer and faster for the company or department that is being audited, and for the company or department doing the auditing. They reduce the chance that something will be misinterpreted or mishandled, and they also lower the chance that there will be any illegal or inappropriate activity on either end of the auditing equation (Cascarino, 2012). That protects all interested parties.

There are qualities and roles of an auditor that go beyond the skill set of normal corporate managers, including an understanding that control does not necessarily come from top management (Cascarino, 2012). Instead, auditors see that control in the business environment of today should focus the control ability on the people who are "owning" the process in which they are engaged (Cascarino, 2012). Management of the project at hand and the auditing environment are part of the roles and qualities of the auditor. It is not that other managers do not have control of their environments, but only that other managers are focused on the top-down approach that does not work well with auditing. Internal controls are vital to the success of an auditor and his or her department, so auditors must be able to control their environments more thoroughly than they would be able to if they were placed under stringent restrictions by upper management (Cascarino, 2012).

Designing and implementing controls are one of the things that auditors do best, because it is part of their jobs (Cascarino, 2012). Since they are so capable of the creation of controls and they understand how those controls should be implemented, their mindsets are different than what would be seen from a standard manager (Cascarino, 2012). Auditors, despite their relatively rigid jobs, are generally more flexible when it comes to management skill, because they know that their field is always changing and they must be able to adapt. Control, for the auditor, is something that comes from within and not something that has to be imposed upon him or her by a manager (Cascarino, 2012). The auditors also understand how to implement and monitor their controls, unlike upper management that often sets controls or rules and then simply allows them to continue being enforced without any regard as to whether they should be changed, amended, updated, or removed altogether (Cascarino, 2012). Auditors look at the world differently, which is part of what keeps them successful.

There are many risks involved in examining evidence in order to arrive at an audit conclusion, and it is important to incorporate the concepts of independence and objectivity (Cascarino, 2012). Auditors that are not objective end up doing a large disservice to their clients. They interject their personal opinion and thoughts into the auditing process, which can create too many concerns regarding what the company has already done, what it should be doing, and why there are differences of opinion on so many issues (Cascarino, 2012). Because auditors are focused on internal controls, it is easy for them to steer the evidence creation and collection a particular way. However, objectivity and independence are the most important traits they can possess. As long as auditing rules are properly followed and no rules of conduct are broken, the way that a particular company handles its business should not be affected by the opinions of the auditors (Cascarino, 2012).

The independence of any auditor is such a significant issue for a company. Auditors can take a long time to arrive at a decision, and if they get that decision wrong they can do serious damage to a company or its stakeholders, as well as tarnishing their own reputations (Cascarino, 2012). Because that is such an issue, auditors have to take care of their clients but also be mindful that they do not get too close to the clients on a personal or professional level. Getting too close to clients can cause a lack of independence and objectivity in an auditor (Cascarino, 2012). While many people who work in companies get close to one another and make friends both inside and outside of the office, auditors must be careful to maintain distance from those they actually audit. Not doing so can mean an auditor who is not objective and who does not maintain enough independence to audit a company properly. Overall, auditors are a different breed and they must remember that so they can do their jobs correctly and keep their work separate.

If auditors do not follow proper rules of conduct, they can have legal action taken against them. This has happened to auditors in the past that do not follow Sarbanes-Oxley and other rules of corporate governance (Cascarino, 2012). Each auditor has rules that he or she follows because they are required for the profession. Additionally, auditors may have opinions that they consider valid and from which they will not deviate. Some of these are their own "rules," and they live by them professionally. Others are rules and opinions that belong to others and which they have taken as their own. Regardless of those, however, the main rules of conduct that are followed by auditors are those which are required by law and that cannot be changed based on the opinion of the auditor (Cascarino, 2012). Auditors who are not willing to follow the rules of conduct end up in trouble, because breaking rules where company audits are concerned can be grounds for prosecution and criminal charges (Cascarino, 2012).

Financial issues are among some of the most significant problems that auditors face, since they have their own reputations on the line along with the reputations of the clients they audit (Cascarino, 2012). Accounting and auditing firms can cause national and international scandals, like the Enron debacle. When a company attempts to hide what it is doing and its misdeeds are discovered in an audit, that company can attempt to put the blame onto the auditor and make it appear that the auditor did not do his job correctly. Auditors who have been found not to follow the rules at any point in their careers will have a great deal of trouble being trusted when they do legitimately discover a problem in the financials of a company. The rules can occasionally change for auditors, however, just like the tax code and other financial requirements. Auditors need to make sure they keep up with the rules and requirements of their professions, in order to be as successful as possible and do the best job for their clients who are trusting in them (Cascarino, 2012).

There are several goals that have to be attended to within the control process. One of these is preventive controls, and they relate to the overall auditing process through an assurance that everything is working as expected from the beginning (Cascarino, 2012). When preventive controls are employed, there is less of a chance of needing other types of controls that would occur later, after a problem has already taken place and has to be corrected or accounted for in some way (Cascarino, 2012). Preventive controls cannot catch everything, of course, because they are not completely infallible. They can fall victim to misuse and abuse just like any other controls in the auditing profession. There are no infallible controls. However, preventive controls are better at catching more serious issues and stopping them from ever getting started (Cascarino, 2012). That can give auditors and their clients peace of mind, and also reduce the number of errors seen during the auditing process.

Preventive measures provide clients… READ MORE

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