Accounting
How to perform an Information Technology Risk Assessment?
Risk assessment is an initial step during a Risk Management program –a company must have program to manage uncertainty in business competition. However the question may be arising is how to perform the correct IT Risk Assessment that could give an impact to business performance, not only as part of internal audit services.
Recently, the The Institute of Internal Auditors, release a guidance how to perform an IT Risk Assessment. Basically the assessment method included this five step of identication, such as:
The Guide to the Assessment of IT Risk (GAIT) Methodology
1. Identify the critical IT functionality
2. Identify the significant application where ITGC need to be tested
3. Identify ITGC process risk and related control objectives
4. Identify the key ITGCs to test that meet the control objectives
5. Perform a reasonable person review
Do accountant and auditor need XBRL for Financial Reporting Standard?
XBRL (XML Business Reporting Language) is a XML derivative for Business Reporting purpose. Equal to Chemical Markup Language (CML) an XML derivative in Chemistry field or other XML derivative. The XML trend supposed to changing the way of data communication in financial statement reporting environment, by making interconnection between application become more easier. Imagine the situation when one subsidiary company want to send the financial report to global head quarter, and find the IS auditor should perform mapping account which really time consuming
XBRL supposed to be changing the way of auditor checking the financial statement. But the problem is vary, since its quite new, most of country have decided not to make a consortium to standardize those standard. This standardization should put at the first priority, and after that the implementation at each application will also taking longer time.
In my opinion, we need XBRL when this situation happens:
1. Working with multiple ERP system
One of biggest problem when auditing big and large company with global subsidiary is when checking the consolidated account. Imagine that each subsidiary have their own accounting system. The US based subsidiary have SAP, the UK branch have JD Edwards, and the India based plant have the local develop ERP. So how consolidated account could be checked effectively if we don’t have same language -in this case XBRL.
