In the class of specifying the term internal audit by research workers, many different positions were found and in the survey of Unegbu and Obi, they pointed out that Internal audit “ steps, analyses and evaluates the efficiency and effectivity of other controls established by direction in order to guarantee smooth disposal, control cost minimization, guarantee capacity use and maximal benefit derivation. ” Likewise, Nagy and Cenker ( 2002 ) , in their research, stated that the internal auditing map is “ an independent, nonsubjective confidence and consulting activity designed to add value and better an administration ‘s operations. ” Therefore, as mentioned in the Commercial Bank Examination Manuel ( 2006 ) , “ professional internal hearers can lend a wealth of information to their administrations over and above the confidence they provide by measuring the quality of control systems and on-going operations. ”
The technological developments around the universe have greatly increased the growing in auditing tools and package. In this context, it was discussed by John Siltow ( 2003 ) that, “ aˆ¦ , the mean internal hearer receives well more exposure to IT systems than in the past, Technology plays a cardinal function in the manner modern administrations map, and it has become integrated to the grade that virtually every type of audit requires at least some consideration of IT issues. ” Additionally, Chrismastuti and Sitawati ( 2010 ) argued that internal hearer should be involved in the development of the company information system in order to understate the hazards associated with system development undertaking. Therefore, “ as technological alterations occur more rapidly, hearers must maintain gait with emerging technological alterations and their impacts on their client ‘s informations processing system every bit good as their ain audit process ” and this point was brought frontward in a survey conducted by Rezaee and Reinstein ( 1998 ) .
Furthermore, IT scrutinizing can be referred to as a specializer type of internal scrutinizing including reviewing and coverage on all facets of the systems, that is, hardware, applications, IT environment and system development. In short, harmonizing to Moorthy et Al. ( 2011 ) , there are four factors that need to be considered when using IT to internal auditing and these factors are: identify guidelines available to best patterns, package and hardware to help scrutinizing procedure, accounting criterions and the functions of internal hearer. Furthermore, an internal hearer normally makes certain that the internal control system is running swimmingly and that all hazards are minimised in an administration therefore, in a survey, Ratcliffe and Landes ( 2009 ) believe that “ internal control promotes efficiency, reduces hazards of plus loss, and helps guarantee the dependability of fiscal statements and conformity with Torahs and ordinances. ” In add-on, they besides identified five constituents of internal control which are: the control environment, hazard appraisal, control activities, information and communicating and monitoring.
Consequently, hearers make usage of Computer-Assisted Audit Techniques ( CAATs ) to transport out their work which can be divided into 3 chief classs viz. : audit package, trial informations and other techniques. In this mode, Romas Staciokas and Rolandas Rupsys ( 2005 ) aimed to understand the internal audit maps, explore deduction of information engineering ( IT ) and analyze the advantages of internal audit in the organizational administration. Furthermore, Yang et Al. ( 2011 ) concluded in their survey that “ the version capableness of computerised internal controls had a important influence on internal control efficaciousness and operating public presentation ” but with the execution of new technological tools, hearers duties keep increasing. This can be supported with the research made by Jayalakshmy et Al. ( 2005 ) who discussed the force per unit areas that hearers would confront in the epoch of globalisation and challenges in order to keep trust and unity. Additionally, John Siltow ( 2003 ) has explored the interconnectedness of internal audit pattern and exposure to IT risks in a general manner and about every way of the hearers in executing their occupation, pointed out that “ internal hearers need to pay more attending towards mandate procedures. In this kernel, entree control represents as the “ front door ” to the administration. ” However, Tongren ( 1997 ) argued that “ Progresss in IT continuously render control procedures disused ; and the “ value ” of traditional internal audit becomes earnestly questioned. ”
Undoubtedly, internal hearers should be good versed with a computerised system and this will decidedly be an advantage to both the companies and the internal hearers. Indeed, Kopp and Bierstaker ( 2006 ) stated in their article that the “ designation of internal control strengths is of import to avoid unneeded substantial testing ” and Moorthy et Al. ( 2011 ) besides argued that the “ effectual usage of audit engineering tools is critical to the success of audit activityaˆ¦ ” Given, the benefits that internal hearers are acquiring from computerised system, they should besides be prepared technologically in order to be able to get by with these alterations aptly. Correspondingly, in a survey carried out by Dr Ahmad A. Abu-Musa ( 2005 ) , it was concluded that internal hearers need to better their accomplishments and cognition of computerised information systems in order to be in a better place to program, direct and reexamine the work performed. Consequently, it has besides been specified in the International Standards for the Professional Practice of Internal Auditing ( 2008 ) , that “ internal hearers must heighten their cognition, accomplishments and other competences through go oning professional development. ”
Interestingly, the banking and insurance sectors are turning quickly and are get bying with all related technological promotions. In fact, Hermanson et Al. ( 2012 ) conducted a sector by sector analysis where they came to the point that, “ aˆ¦ Bankss and other fiscal services houses appear to hold a more robust monitoring controls than do healthcare and other services. ” For case, in a advisory paper brought frontward by the Basel Committee ( 2000 ) , it can be noted that “ the internal audit map is portion of the on-going monitoring of the system of internal controls and of Bankss ‘ internal capital appraisal process, because it provides an independent appraisal of the adequateness of, and conformity with the Bankss ‘ established policies and processs. ” In this connexion, Xu Zhi-Di ( 1997 ) found that the banking internal audit can be sub divided into four parts: comprehensive audit, assorted types of peculiar audit ( including: exigency audit, imparting audit and investing profile audit ) , uninterrupted audit and assessment of auditee. Hence, harmonizing to Adela Socol ( 2011 ) , Bankss need to be resilient in instance of terrible dazes that can impact economic systems like the recent fiscal crisis. Undeniably, a strong internal control system is indispensable in the fiscal sector.
Subsequently, professional competency ( most significantly today, the usage of information engineering tools, package and uninterrupted professional development in the field of scrutinizing ) of the internal hearers is really of import for the proper operation of the Bankss and insurance companies internal control system and this point was proved in a research brought frontward by Adela Socol ( 2011 ) , where it was concluded that “ a cardinal component of a strong internal control system is realisation by each employees of necessity of carry throughing his/here duties in an efficient manneraˆ¦ ” Hence, Moorthy et Al. ( 2011 ) reported on a cardinal function of the hearer that is, hearers should non merely be involved in get bying with alterations in engineering but they should besides explicate the effects of those alterations to others. Similarly, harmonizing to Fadzil et Al ( 2005 ) , “ aˆ¦performance of audit work, professional proficiency and objectiveness significantly act upon the control environment facet of the internal control system. ” On the other manus, in a research conducted by Shing-Han Li et Al. ( 2007 ) , the job identified refering the execution of an effectual uninterrupted auditing was that “ hearers normally can non thoroughly carry out uninterrupted E-auditing because of their deficiency of IT proficiency and inefficient communicating and interaction with IT forces and information system. ”
Consequently, harmonizing to Rezaee and Reinstein ( 1998 ) , “ most accounting minutess should shortly be in electronic signifier without any paper certification ” but, engineering continues to increase the strategic importance and hazard to administrations therefore, rapid deployment of emerging engineerings creates hazard ( top 10 emerging IT audit issues by Deloitte 2011 ) . Besides, after an analysis made by the International Monetary Fund ( 2008 ) , it was deduced that the insurance industry in Mauritius “ continues to be focused on regulation conformity instead than measuring the effectivity of internal controls and hazard direction. ” Although, it was stated by Rezaee and Reinstein ( 1998 ) that, “ the usage of electronic commercialism alterations the manner concern minutess are processed and consequently the nature of audits ” , there is high hazard of the failure of the computerised internal control system. Obviously, in order to avoid the declared hazard, Thomas P. Dinapoli ( 2007 ) stated that the “ internal audit units should keep certification for each audit and subsequent followup ” and besides “ the formation of paperless minutess means computerised controls should do accommodations consequently, in order to guarantee consistence between internal control techniques and the IT environment ” ( Yang et al. 2011 )
Similarly, Kopp and Bierstaker ( 2006 ) found that “ the user engagement in internal control certification performed by hearers in the complete status could increase the degree of consistencyaˆ¦ ” Continuously, another of import facet of hazard associating to a computerised internal control system is the electronic incursion and deficiency of information security. Surely, as specified by Jamal Adel Sharain ( 2011 ) , “ the internal hearer has a important function in the protection of computerised accounting information systems from electronic incursion, represented in proving the security controls against the contained information with an unknown sourceaˆ¦ ” In this peculiar construct, it was discovered that there is a deficiency of qualified and competent staff and that “ small advancement has been made in developing and implementing an early warning systemaˆ¦ ” refering insurance ordinance and supervising in Mauritius ( Mauritius Financial System Stability Assessment study 2008 ) .The same writer that is, Jamal Adel Sharain found that “ aˆ¦the more the hearer has knowledge and skill, his function will be more effectual in the protection of the computerised accounting information systems. ” However, Shing-Han Li et Al. ( 2007 ) discussed another job with uninterrupted auditing, that is, “ a database system normally merely shops the most updated record of a dealing without maintaining its updating trail. ”
Conversely, in order to understate the hazards outlined in the old paragraph, efficient package can be used by the fiscal sector that are efficient and effectual and in fact, in an article written by Bruce I. Winters ( 2004 ) , it was argued that “ document direction and work flow tools are more capable of interacting with other package and can turn to comparatively consecutive frontward maps such as study tracking. ” In add-on, this package “ allow users to execute elaborate indexing and searching of multiple papers types, including electronic mail, flow charts and narrations, to form and recover text, images and numeral informations ” and illustrations of such package are: Documentum, IBM/Lotus, FileNet. The same article outlined other package like business-performance direction ( illustrations: Fuego, SAS ) and real-time conformity tools ( illustrations: Certus, Microsoft ‘s SharePoint Portal Server ) and harmonizing to the writer all these tools are used to analyze hazard and controls. Further, Richard B. Lanza ( 2005 ) pointed out that “ controls proving package analyses the database that support a company ‘s accounting package ” and it was besides deduced that “ hazard direction database maintain certification around internal controls, and controls proving package helps automatize the testing of peculiar controls such as computing machine controls. ” However, the accounting package is really expensive but Max Weber concluded that “ aˆ¦large corporations apply complex accounting systems which cost 1000000s dollars but the consequence for their application exceeds all the outlooks. ”
Another of import facet of the well operation of the computerised internal control system is the independency of the internal hearers and it was recommended in a study by Thomas P. Dinapoli ( 2007 ) that “ professional audit criterions require each internal audit administration to sporadically undergo an independent reappraisal of the quality of their audit activities ” in order to guarantee consistence and conformity with the audit criterions. Furthermore, in a survey, Jamal Adel Sharain ( 2011 ) concluded that “ the sweetening of internal hearer ‘s apprehension and recognizing to the nature of bank ‘s work in order to implement his function in the protection of the computerised accounting information. ” Alternatively, the independency of the internal hearer is really of import in order to be able to protect the confidentiality of information particularly when sing banking and insurance activities. In short, for the computerised internal control system to work decently, “ the bank ‘s internal audit map must be independent of the audited activities, which require the internal audit map to hold sufficient standing and authorization within the bank, thereby enabling internal hearers to transport out their assignment with objectiveness ( Basel Committee on Banking Supervision 2011 ) .
Therefore, as stated by Moorty et Al. ( 2011 ) , “ emerging engineerings will continuously alter the form of and attack to concern controls, and audit attacks and techniques must alter consequently. ” In add-on, “ the version capableness of computerised internal controls had a important influence on internal control efficaciousness and operating public presentation ” ( Yang et al. 2011 ) and it was suggested in the same survey that “ computerised controls will bit by bit replace manual controls, in order to set up an machine-controlled and timely control mechanism. ” Therefore, harmonizing to Rishel and Ivancevich ( 2003 ) , “ internal hearers can and should supply input with respect to system constellation in order to guarantee that the proper built-in controls are in topographic point. ” Likewise, the same writer explained that in order to understate the hazards, proper certification should be made by internal hearers so that alterations in the Computer Information System could be traced easy and besides for better control. Nevertheless, the aims of the hearer sing the work to be carried out for the proper running of the internal control system of the Bankss and insurance companies do non alter in a computerised environment.
Finally, a general point would be that the Bankss ‘ and the insurance companies ‘ computerised internal control system need to be constructed on cardinal elements in order to: guarantee conformity with Torahs and ordinances, achieve long-run profitableness, maintain dependable and consistent fiscal coverage and cut down the assorted hazards. Hence, the internal hearers who are responsible for the proper operation of the computerised internal control system of the Bankss and insurance companies indirectly preserve these companies ‘ repute. Each of these theoretical definitions and research workers ‘ positions did do an of import part to the apprehension of the: internal audit map and the computerised internal control system and despite the unfavorable judgments made about the computerised internal audit control system, it ‘s popularity in the banking and insurance sectors in peculiar remain mostly unrelieved in Mauritius.