Tag (SQ): IT Audits

CleanSweep
Internal auditors often assist management in performing internal review assignments covering, for example, human resources, procurement (purchasing), marketing and treasury activities. Such reviews involve:
the identification of risks;
the identification of systems of internal control and procedures implemented to manage those risks;
tests of controls to ensure that internal controls are operating effectively;
an evaluation of the overall effectiveness of the design and operations of controls in managing the risks identified.
You are the internal auditor for a private company, CleanSweep. CleanSweep provides cleaning services to shops and offices and has a reputation for high quality work. You have been asked to review the human resources, procurement and marketing functions within the company.
CleanSweep employs about 500 cleaning staff, all of whom are on the payroll, and most of whom work part time. CleanSweep does not employ sub-contractors. CleanSweep has a high turnover of staff.
The company buys its computers, office stationery and furniture, cleaning materials, equipment and work clothes for staff, from a variety of different suppliers. It processes its payroll in-house.
The company has recently decided to out-source its marketing to a large, aggressive, third party company that will advertise CleanSweep’s services by means of direct mail, sometimes by offering discounts. This company has been criticised in the past for breaching advertising regulations. There is growing price competition in CleanSweep’s market. CleanSweep is struggling to maintain its profitability and would like to expand its client base.
CleanSweep has three main functions:
human resources;
procurement; and
marketing.

Required
(a) For each of the three main functions at CleanSweep describe the:
(i) risks that you expect the company to face;
(ii) controls you expect to be in place to manage the risks you have identified in (i), above;
(iii) tests of control you should perform to check that the controls you have identified in (ii) above are operating effectively.
Marks will be awarded as follows:
(1) Human resources;
(2) Procurement;
(3) Marketing.
You may present your answer in tabular format, if you wish.
(b) Internal audit also perform other work on behalf of management, such as value for money (VFM) audits, best value audits, financial audits and information technology (IT) audits.
Explain what is meant by each of the above four types of audits