Incremental Ontology Population And Enrichment – Discussion

Business and Audit Risk

Discuss about the Incremental Ontology Population and Enrichment.

The basic role of an audit is to provide a company certain data that is gathered from handling and management of various financial and business records prepared by a specific personnel called the auditor (Cole, 2017). Freedom of an auditor enables him to perform his duties based on his own ways rather than working on preset working guidelines set by the company. Accounting and business firms at times draw in set audit charges at not as much as the market rate. However, they generally compensate for the shortage by using and involving non-audit administrations like administration consultancy and duty guidance. This raises worries that the auditor’s advantages to ensure investors of a company and his business advantages may strife with each other (Islam et al., 2017). Thus, some audit firms have business interests to ensure as well. Against the auditor’s freedom, the auditor has to rely upon the company management board for his appointment in the role of auditor.

Auditor independence is necessary in certain ways as he must be allowed to work in his own terms in order to get the best results out of him. Auditing is a process that involves the use of essential and important data records of the company. Hence, the best process for auditing cannot be exactly identified by the administration team unless an expert auditor is appointed (Gillani & Ko, 2015). The auditor determines the best method for auditing based on the type and amount of data that is to be used and the ultimate goal of the audit. However, there is also an issue that what if the auditor is given 100% independence and he is misusing it for his own personal gain or even a fraud. Hence, most of the companies and organizations do not want to grant full independence to the auditors (Bradford & Herman, 2017). This is not only affecting the company business but also the auditor performance as he is forced to work in a specific way that may not be suitable for that particular type of audit.

An IT audit is the review and operation of data that is related to information technology systems (Gantz, 2014). As per the general convention of an audit process, the initial step taken by the auditors is data assembling followed by using all the data into a specific audit structure. Some risk appraisal choice can help relate the money saving advantage examination of the control to the known risk. In a risk-based approach, IT auditors are depending on inner and operational controls and also the learning of the company or the business.

Internal Controls and IT Audit Controls

The audit acceptance and planning procedure can be contrasted with a guide which gives direction for the audit group to take after all through the audit so as to enable it to achieve the right last conclusion, i.e. regardless of whether the financial articulations give a genuine and reasonable perspective of the position of the company toward the finish of the bookkeeping time frame. The key point is that an audit firm does not have any desire to connect with a client who carries with it unsuitable levels of risk; in this manner it is fundamental that an exhaustive appraisal is made of the forthcoming engagement before the firm getting to be plainly drawn in with the client (Chou, 2015). The issues and exercises that an auditor must consider preceding beginning of the hands on work of an audit are of imperative significance. These are alluded to as the audit acknowledgment and arranging stages. Issues to be considered in connection to uprightness, competency and morals that the auditor may have cause to address, are different. Where issues emerge out of any of the above contemplations, the firm should lead proper interviews with the client or outsiders. Should the firm at that point choose to draw in with the client. It must guarantee that a record of the determination of the issues included is archived obviously in the audit document.

Some business and audit risks are listed below in form example samples.

• Buy solicitations from imports are probably going to be in foreign monetary standards (far-fetched yet feasible for trade deals). This builds the risk of wrong interpretation of foreign sums into the domestic cash. There is a risk of error of buys and payables (and potentially of offers and receivables).
• All play equipments sold with a 10-year guarantee. Executives should evaluate the potential repair costs for flawed products sold inside the most recent 10 years, which might be hard to do precisely (Mutiara, Prasetyo & Widya, 2017). There is a risk of error of the arrangement for guarantee costs.
• The expansion in income combined with net overall revenue may not without anyone else offer ascent to doubt. Notwithstanding, the MD/100% investor offering his offers gives a huge motivation to need to control yearly benefits so he can accomplish the most extreme conceivable pick up from the offer deal. There is a risk of error of yearly income/benefit in 20X5.

An entrepreneur should attempt progressing endeavors to make a domain in which fraud is more averse to emerge. The auditor determines the best method for auditing based on the type and amount of data that is to be used and the ultimate goal of the audit. However, there is also an issue that what if the auditor is given 100% independence and he is misusing it for his own personal gain or even a fraud. Hence, most of the companies and organizations do not want to grant full independence to the auditors.

Consultative reviews are proposed to give the audit and risk advisory groups with an autonomous advance appraisal of the current control adequacy and procedural consistence levels of center operational procedures and frameworks that are being executed over any association.

The risk of fraud is reduced drastically if numerous representatives are engaged with various periods of an exchange, since fraud requires the intrigue of no less than two individuals. Subsequently, inadequately characterized sets of expectations and endorsement forms introduce a reasonable open door for fraud. At the point when resources are physically ensured, they are considerably less liable to be stolen (Dzuranin & M?l?escu, 2015). This can include fencing around the stock stockpiling zone, a bolted container for support supplies and instruments, security protect stations, a representative identification framework, and comparable arrangements. At the point when there is no physical or electronic record of an exchange, workers can be sensibly guaranteed of not being gotten, as are more disposed to participate in fraud. This is additionally the case if there is documentation, however the records can be effectively changed.

Audit sampling is the use of an audit methodology in order to determine a particular template sample that can be used to audit a particular set of data. The auditor generally knows about record adjusts and exchanges that might probably contain misquotes. The auditor for the most part will have no unique learning about other record adjusts and exchanges that, in his judgment, should be tried to satisfy his audit destinations. Audit sampling is particularly valuable in these cases.

Autonomous financial and operational reviews that survey the control viability of the authoritative business forms, assess the ampleness of risk controls and to analyze the level of operational consistence with association approaches, systems and key administrative commitments (Coronado, 2014). Inner audits feature process holes and open doors for development through suggestions to senior administration to enhance the authoritative interior controls, operational consistence and risk administration forms.

A free, precise, and recorded appraisal of training to guarantee the control forms set up by the organizations are accomplishing the progressing consistence against the Quality Framework. Quality audits likewise give an autonomous survey of the operational practice reviews.

The auditor’s standard report expresses that the financial articulations show decently, in every single material regard, an element’s financial position, consequences of operations, and trade streams out congruity with proper accounting rules (Bradford & Herman, 2017). This conclusion might be communicated just when the auditor has framed such an assessment on the premise of an audit performed as per by and large acknowledged auditing norms.

An investigate the financial proclamations of a unincorporated element ought to be tended to as conditions manage, for instance, to the accomplices, to the general accomplice, or to the proprietor.

The auditor’s standard report recognizes the financial proclamations audited in an opening (starting) passage, portrays the idea of an audit in an extension section, and communicates the auditor’s sentiment in a different assessment section. The report might be routed to the company whose financial proclamations are being audited or to its top managerial staff or investors.

Once in a while, an auditor is held to audit the financial proclamations of a company that is not a client; in such a case, the report is usually routed to the client and not to the chiefs or investors of the company whose financial articulations are being audited.

The auditor determines the best method for auditing based on the type and amount of data that is to be used and the ultimate goal of the audit. However, there is also an issue that what if the auditor is given 100% independence and he is misusing it for his own personal gain or even a fraud. Hence, most of the companies and organizations do not want to grant full independence to the auditors. This process also involves legal liabilities and issues for the company. In the terrains where the customary law wins, the courts have since a long time ago respected individuals from the talented callings as having uncommon duties to general society well beyond the particular commitments which they may accept by contract with the people who draw in them.

The basic role of an audit is to provide a company certain data that is gathered from handling and management of various financial and business records prepared by a specific personnel called the auditor. Freedom of an auditor enables him to perform his duties based on his own ways rather than working on preset working guidelines set by the company. Accounting and business firms at times draw in set audit charges at not as much as the market rate. These exceptional non-authoritative obligations are encapsulated in guidelines of legitimate risk which have solidified throughout the years out of incalculable legal choices in a wide assortment of authentic circumstances. They have turned into a piece of the custom-based law of torts.

References

Bradford, M., & Herman, B. (2017). Auditing and Security of ERP Systems.

Chou, D. C. (2015). Cloud computing risk and audit issues. Computer Standards & Interfaces, 42, 137-142.

Cole, C. (2017). KPMG IT Audit Overview and Introduction: A Classroom Exercise.

Coronado, A. S. (2014). IT Auditing: Using Controls to Protect Information Assets , by Chris Davis, Mike Schiller, and Kevin Wheeler.

Dzuranin, A. C., & M?l?escu, I. (2015). The Current State and Future Direction of IT Audit: Challenges and Opportunities. Journal of Information Systems, 30(1), 7-20.

Gantz, S. D. (2014). The Basics of IT Audit. Syngress.

Gillani, S., & Ko, A. (2015). Incremental ontology population and enrichment through semantic-based text mining: an application for it audit domain. International Journal on Semantic Web and Information Systems (IJSWIS), 11(3), 44-66.

Islam, S., Jiang, R., Poston, R. S., Gal, G., Phillips, P., & Stafford, T. F. (2017). The Role of Accounting and Professional Associations in IT Security Auditing.

Li, T., & Chen, L. (2015). The IT Audit Objective Research Based on the Information System Success Model under the Big Data Environment.

Mutiara, A. B., Prasetyo, E., & Widya, C. (2017). Analyzing COBIT 5 IT Audit Framework Implementation using AHP Methodology. International Journal on Informatics Visualization, 1(2), 33-39.