During the last few decades, organizations across practically every industry have invested a lot into IT solutions. These investments play a critical role in building a solid competitive advantage for the business. But new technologies also open the doors to new risks.
That's why technology risk management and audits have become so important in the current IT landscape. But what exactly is an IT audit? What does an IT auditor do when assessing a company? Is this the best way to protect your organization from IT security incidents?
Keep on reading this article to learn everything you need to know about IT audits and why they bring such incredible value to organizations in every sector.
Table of contents:
- What is the IT audit and when should you perform one?
- Examples and types of IT audit services
- Information technology audit process – overview of the key steps
- How to plan an IT audit process for your company
- The future of IT auditing
What is the IT audit and when should you perform one?
An IT audit is the process of investigation and assessment of IT systems, policies, operations, and infrastructures.
Thanks to an information technology audit, an organization can better understand whether the existing IT controls effectively protect its corporate assets, ensuring data integrity and alignment with the business and financial controls.
The key goal of an IT audit is to check all of the security protocols and processes in place and the entire IT governance.
To understand how IT audits work, think of financial audits carried out to evaluate the company's financial position. In comparison, IT audits still seem to be a relatively new activity.
Who is an IT auditor and what's their job?
An IT auditor is an unbiased observer who makes sure that all the IT controls are appropriate and effective.
An IT auditor is responsible for developing, implementing, testing, and evaluating the IT audit review procedures.
These procedures can cover software development and project management processes, networks, software applications, security systems, communication systems, and any other IT systems that are part of the company's technological infrastructure.
By carrying out such IT audit projects, IT auditors play a key role in the chosen IT aspect of the organization. For example, in security audits they ensure that the organization and its sensitive data are protected from both external and internal security threats. It's the auditor's job to check whether the organization is vulnerable to data breaches and other cybersecurity risks.
Another area of an IT auditor's work relates to developing adequate security and compliance procedures in case of an unlikely event that threatens the health or reputation of the company.
Key responsibilities of an IT auditor:
- Identifying the audit scope and primary objectives,
- Developing and planning the audit,
- Coordinating and executing all the audit activities,
- Following the auditing standards established by the company and the industry,
- Generating a detailed report and best practices allowing companies to meet the requirements of the audit,
- Maintaining and updating all the audit documentation,
- Passing on audit findings and recommendations to relevant people,
- Making sure that the recommendations are implemented (only if the contract clearly states so and the service is included in the cost).
Examples and types of IT audit services
We can differentiate between several types of audits depending on their areas of focus and methodologies.
Innovation capabilities audit
This type of audit creates a risk profile for both new and existing projects. Its goal is to assess the depth and scope of the company's experience in the given technology area. The IT auditor also analyzes the general direction of the client’s industry.
Innovative comparison audit
This type of audit analyzes the innovative capabilities of the company in comparison to its key competitors. The idea is to examine the organization's Research and Development or information processing facilities and its track record in delivering these products in a timely manner.
Technological position audit
This type of audit reviews all the technologies that the organization is currently using and the ones it needs to add. To better understand their role in the organization, the IT auditor may categorize these technologies as base, key, pacing, or emerging.
Examples of IT audits
Systems and applications audit
This audit aims to verify that all the systems and applications used by the organization are efficient and adequately controlled. The idea here is to check whether these systems ensure reliable, timely, and secure company data – as well as input, processing, and output at all levels of their activity.
One subcategory of these audits is systems and processes assurance audits focus on business process-centric IT systems and assist financial auditors. Another interesting subtype is the SaaS management discipline audit that comes in handy for companies with cloud-heavy infrastructures. This audit reveals all the applications in use to prepare the company for a proper software audit.
This type of audit verifies whether the systems under development meet all of the organization's key business objectives. A certified information systems auditor makes sure that the systems are developed in line with the generally accepted standards for that area before their deployment. This is especially important for IT infrastructures that are evolving really fast under the pressure of cloud implementations within sectors.
IT management and enterprise architecture
This audit verifies that IT management developed an organizational structure and procedures to deliver a controlled and efficient environment for any IT task. Another aspect of this audit deals with the security procedures, checking whether they ensure secure and controlled information processing. It may also include enterprise architecture review and identification of tools, frameworks, and best practices in this area.
Client/server, telecommunications audit
This type of audit focuses on telecommunications controls that are located on the client, server, and network connecting the clients and servers. IT auditors examine the telecommunications set up to check if it's efficient and timely for the computers receiving the service. Intranet and extranet analysis may be part of this audit as well.
Cloud vendor audit
This is an assessment that aims to check and document the cloud vendor's performance. The goal is to see how well the provider is doing in general and whether they meet all the established controls, best practices, and SLAs.
A cybersecurity audit is a systematic review and analysis of the organization's information technology landscape. Its goal is to highlight any weaknesses or opportunities that cybercriminals might have for penetrating the systems. We can differentiate between various IT security audit types such as risk assessment, penetration testing, compliance audit, and vulnerability assessment.
Information technology audit process – overview of the key steps
IT-related audit projects can vary by organization, but each is bound to have some form of these four stages:
- Planning – the first stage is the most important because planning the audit ahead of time prevents unnecessary costs and allows auditors to use their resources more effectively. In this stage, auditors review the internal procedures related to IT and consult with experts. This stage aims to develop a detailed IT audit plan that covers the scope, objectives, deadlines, process, and budget of the planned audit.
- Fieldwork – this stage is usually carried out on-site. After observing an audited process or system on-site and testing the controls, the audit team identifies and analyzes key risks. If the controls are found to be working as intended, they are incorporated into a preventive action plan or recommendations in the final report.
- Reporting – during and after conducting an IT audit, the auditor creates a report that explains how well the company's controls are performing. They write up a report draft, which is then reviewed with top management and finalized for delivery.
- Follow-up – audits often don't end once they've been carried out and filed away in the archives. If stated so in the contract, auditors may follow up to make sure that the recommendations are followed and whether the improvements are working adequately. The audit is officially closed if the follow-up demonstrates that the company successfully implemented the suggested improvements.
How to plan an IT audit process for your company
Here are the most important elements that are common to audits to help your company make the most of IT auditing.
Know your IT environment
You need to thoroughly understand your IT environment flows, including internal IT procedures and operations. If you don't, the chances are high that the audit work is misdirected. As a result, it might bring you unsuitable or incorrect results insights.
The initial research work requires a high-level overview of the company's IT procedures and control environment. You need to focus on the basic principles of IT security, such as availability, confidentiality, and integrity.
Research key areas
This type of initial research should cover areas such as:
- change management – change controls involving software and hardware updates to critical systems,
- access security – across both internal and external systems,
- business continuity/disaster recovery - the ability of the company to safeguard its information assets from disasters and quickly recover them.
Examine your IT risks
Another area of interest relates to all the potential cybersecurity risks your company might experience. The idea is to identify the most important risks, link them to control objectives, and establish specific controls to mitigate them.
IT auditing standards and guidelines like ISO 27001 can be used here to advise on the controls that reduce the risks to an acceptable level.
The future of IT auditing
The rise of digital transformation initiatives across practically every industry led to a massive change in the role of IT auditing in the current IT landscape. Audits play an essential role in ensuring that new technology solutions never open the organization to unacceptable risks.
That's why we're likely to see the demand for IT auditing services increase as more companies implement new systems and reach out to experts who can help them meet today's customer demands without exposing them to unnecessary risks.
Have you ever carried an IT audit? Or perhaps you're planning one now? Give us a shout-out in the comments. We look forward to hearing about your auditing experiences and the value these audits brought to your company.
Feel free to take a look at the audit & consulting services that we can offer you at Codete at our dedicated IT consulting page – get to know our consulting experts and see how we can help your company use technology to achieve its business goals.