British Computer SocietyNORTH LONDON BRANCHAudIT to BenefIT- 6 sides of the diceWednesday 16th January 2008, 18.30 – 20.30 1 topic, 2 hours, 4 sponsors 6 views, 6 expert presenters 1 great audience
British Computer SocietyNORTH LONDON BRANCH AreYouanAuditor?
British Computer SocietyNORTH LONDON BRANCH 4 Sponsors: • * Gotham Digital Science www.gdssecurity.com * • * ISACA London Chapter www.isaca-london.org * • *IT Faculty of the Institute of Chartered Accountants in England and Wales www.icaew.com/itfac* • * SUPINFO The International Institute of Information Technology www.supinfo.com/uk *
British Computer SocietyNORTH LONDON BRANCH 6 Views – plus more! • [Target start time 18.30] • BCS NLB Intro [10 mins.] - Dalim • Why audit? Who needs it? [15 mins.] - Justin • What does the auditor do? [15 mins.] - Nick • What’s audited? [20 mins.] - Fraser • IT audit tools and techniques [15 mins.] - Martin • How auditors use COBIT & IT Assurance Guide  Lynn • How to plan to get value from your audits  - Steven • BCS NLB end of formal event [10 mins.] - Dalim • [Target end time 20.30] • Informal networking (with food & drink) ALL
British Computer SocietyNORTH LONDON BRANCH 6 Expert Presenters • [MC] Dalim Basu, BCS NLB • FRASER NICOL, Ernst & Young • JUSTIN CLARKE, Gotham Digital Science • LYNN LAWTON, ISACA • MARTIN ALLEN, PwC • NICK FELLOWS, Barclays Plc • STEVEN BABB, KPMG & ISACA • [Supporting Cast: NLB team for this event]Jude Umeh, Patrick Roberts, Rebecca King
Why audit? Who needs it?Justin Clarke, DirectorCISA, CISM, CISSP, A.Inst.ISP
What is an audit? • Anyone? • A Definition • An audit is a professional, independent examination of a company's financial statements and accounting documents according to generally accepted accounting principles (Traditional) • an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control (Wikipedia)
Understanding your auditor • Internal or External? • Assurance or Audit? • Key ideas • Independence • Reasonable assurance • Material error • Evidence • Testing/Sampling
Why audit? • Mitigate risk • Regulatory/legal - financial • Measurement/management • Conformity/Compliance • Quality • Environmental • How are we doing?
Who needs it? • Organisations • Large and small • Private, public and government • Stakeholders • Shareholders • Management • Tax payers
Types of audit • External – ITGC, ITAC, SAS70 • Internal – Operational, Business Process, CobIT, COSO • Regulatory - Sarbanes Oxley, Basel II, MiFID • Conformity/Compliance – ISO17799/27001 • Quality – ISO9001 • Environmental – ISO14001
Exploring the world of Internal Audit What does the auditor do and why? Nick Fellows, CISA - Audit Manager 16 January 2008
The Audit Charter • This is a document that defines the Internal Audit function • Its purpose, responsibility, authority and accountability. • What we are there to do • How we will maintain our independence and objectivity • How we will do it and conduct ourselves whilst doing it • The relationship between IA and its stakeholders • The KPIs, what they are and how they are measured Standard S1 and Guideline G5 for Audit Charter can be found on the ISACA website www.isaca.org
The Audit Universe and the Audit Plan • How does the audit department work out what to do? • Populate the audit universe • Prioritise based on risk ranking • Plan • Agree with stakeholders and get sign off from the Board Audit Committee
The audit • Understanding the processes, working out the key controls. • The ‘intention to audit’. • Testing the controls. • And the consequence was… • The report and follow up actions.
Closing thoughts • Risks are mitigated by controls. Whose controls? – yours. • An audit is not something that is done to you. It is something that is done with you. • The more you prepare, the less painful the review will be.
INSTRUCTIONS: • This template is designed for projected documents that will be presented to an audience. • The one template offers a choice of 5 different colour palettes with either a dark or white background. On presentations projected directly from a computer, it is preferred for the background to be dark blue. • How to change colour palette • Format > Slide Design > Color Schemes • Update the cover page • The Service Line flag and Date on the cover page should be updated in the Header & Footer menu at the start of each new presentation. • Go to View menu • Select Header & Footer... • Update the SERVICE LINE and Date 2007 with the appropriate information • Select Apply to All What is Audited? Fraser Nicol – Technology Security and Risk Services,Ernst and Young AudIT to BenefIT Presentation to British Computer Society
IT audit – who, why, what and how? • Internal auditing – is an independent, objective assurance and consulting activity designed to add value and improve an organisations operations • External auditing – is an independent opinion on whether or not financial statements are relevant, accurate, complete, and fairly presented • Both approaches are characterised by a systematic approach to the evaluation of risk management, control and governance processes. A common industry standard for IT auditing is: • COBIT 4.1 – Control Objectives for Information and Related Technology. Set of leading practises (framework) for information technology (IT) management. Created and governed by Information Systems Audit and Control Association (ISACA). COBIT is organised into 4 domains: • Plan and Organise • Acquire and Implement • Delivery and Support • Monitor and Evaluate
Who audits what? PO - Plan and Organise IT Project Management IT Strategic Alignment IT Risk Management Online Sales Application Project AI - Acquire and Implement Expect Internal Audit Focus SDLC IT Procurement Change Management Cross Domain Reviews Third Party Managed Services DS - Delivery and Support DRP / BCP Application Review System Security Network Management Review Expect External Audit Focus ME - Monitor and Evaluate Data Centre Management Review IT Control Operation Software Licensing KPI / SLA Review
What gets audited and why? • Example IT risk identified • IT Infrastructure Scalability • Exploitation of Security Vulnerabilities • IT Strategy not formulated • IT Upgrade Activities lead to loss of service • Inappropriate IT User activity Very significant threat 21–25 3 Significant threat 2 16–20 4 Moderatethreat 1 5 11–15 Low threat 6–10 Key IT audit approach chart No threat A – Potential Over Control 1–5 B – Low Risk / Mature Controls 1 2 3 4 5 Inherent risk / Control maturity C – Low Risk / Limited Controls Partially controlled D – Higher Risk / Mature Controls No controls Ad hoc Fully controlled Over controlled E – Higher Risk / Limited Controls
Summary • Understand who the auditors are, what they are looking for, and what the output of the audit is going to be • Understand the risks to your own areas, be proactive in engaging with the auditors to explain your area and align their understanding of key risks with yours • Early planning is always performed at a high level, sometimes the principle actions sit with IT or the business. You need to be involved as closely as possible in audit planning to
Contact • Fraser Nicol,Senior Manager • Tel: 020 7951 0748 • Mob: 07776047344 • email@example.com
Tools and Techniques Martin Allen FIIA, QiCA, CISA 16 January 2008 PwC
Tools and Techniques Raw goods and services Income Laws and regulations Competitor Intelligence Social responsibilities • The Environment Finished goods and services Expenditure Financial Accountants Corporate Reporting Non-financial/regulatory reporting Corporate Entity Computer System Financial Records Management Accounts MIS/ Datawarehouse
Tools and Techniques • Indicators that computer tools and techniques would help audit process: • Requirement to analyse large volumes of data or complex calculations • Reliance upon reports generated from computer systems • ‘Black box’ style systems where complex processing of data is not transparent • Key reconciliation reports regularly highlight differences • New or modified systems • Interfaces between computer systems poorly controlled
Tools and Techniques • Tools available on the desktop: • Spreadsheets • Databases • MS Query
Tools and Techniques • Tools that can be acquired: • IDEA • ACL • OAK • Datanomic
Tools and Techniques • Risks: • Can allow the auditor to reach the wrong conclusion • Easy for inexperienced auditors to be caught out • Data interrogation does not test controls • Benefits: • Allows 100% sample size • Allows quick identification of unusual or required data • Allows auditor to use the power of the computer to improve the efficiency and effectiveness of the audit
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2008 PricewaterhouseCoopers LLP. All rights reserved. 'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. PwC
How Auditors use COBIT® and the IT Assurance Guide Lynn Lawton, International President ISACA, Inc, and The IT Governance Institute, Inc.
Over 70,000 members in 140 countries Develop and maintain tools for IT and business management, e.g. COBIT and ValIT Develop and administer certifications, e.g. CISA, CISM, and, coming soon, CGEIT Deliver conferences and educational events around the world Deliver research and thought leadership on topical issues www.isaca.org and www.itgi.org ISACA and The IT Governance Institute
COBIT Framework BUSINESS OBJECTIVES AND GOVERNANCE OBJECTIVES INFORMATION C O B I T F R A M E W O R K ME1 Monitor and evaluate IT performance. ME2 Monitor and evaluate internal control. ME3 Ensure compliance with external requirements. ME4 Provide IT governance. PO1 Define a strategic IT plan. PO2 Define the information architecture. PO3 Determine technological direction. PO4 Define the IT processes, organisation and relationships. PO5 Manage the IT investment. PO6 Communicate management aims and direction. PO7 Manage IT human resources. PO8 Manage quality. PO9 Assess and manage IT risks. PO10 Manage projects. Integrity Efficiency Effectiveness Availability Compliance Confidentiality PLAN AND ORGANISE MONITOR AND EVALUATE Reliability IT RESOURCES DS1 Define and manage service levels. DS2 Manage third-party services. DS3 Manage performance and capacity. DS4 Ensure continuous service. DS5 Ensure systems security. DS6 Identify and allocate costs. DS7 Educate and train users. DS8 Manage service desk and incidents. DS9 Manage the configuration. DS10 Manage problems. DS11 Manage data. DS12 Manage the physical environment. DS13 Manage operations. Applications Information Infrastructure People DELIVER AND SUPPORT AI1 Identify automated solutions. AI2 Acquire and maintain application software. AI3 Acquire and maintain technology infrastructure. AI4 Enable operation and use. AI5 Procure IT resources. AI6 Manage changes. AI7 Install and accredit solutions and changes. ACQUIRE AND IMPLEMENT
Awareness and Communication Responsibility and Accountability Goal Setting and Measurement IT Process/Maturity Tools and Automation Skills and Expertise Policies, Standards and Procedures Levels for Process XX 3 Defined Process 2 Repeatable but Intuitive 1 Initial/Ad Hoc • Measuring progress 5 Optimised 4 Managed and Measurable Start point Where you want to be Interim target status
Measuring progress 2008 Q2 2007 Q2 2007 Q1 2007 Q4 2007 Q3 2008 Q1 IT Process/Maturity Levels for Process XX 5 Optimised 4 Managed and Measurable 3 Defined Process 2 Repeatable but Intuitive 1 Initial/Ad Hoc Start point Where you want to be Interim target status
For more information, visit: www.isaca.org www.itgi.org ISACA and The IT Governance Institute
How to plan to get value from your audits 16 January 2008 AUDIT
Disclaimer The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
Agenda • Recap – What is audit? • Pre-audit activities • During the audit • What happens next?
Recap – What is audit? • Internal auditing • Internal, yet independent assurance over internal controls • Designed to add value and improve an organisations operations • External auditing • External, independent opinion over financial statements • Audit should be viewed as a critical friend rather than a hindrance • It can add value to your organisation – so treat it this way • An audit is not something that is done to you; It is something that is done with you
Pre-audit activities • What to do before the audit takes place • Understand who the auditors are, their scope, objectives and deliverables • Get involved in audit planning – understand the risks and issues in your own areas • You can influence – are there any areas you want covered? • Plan – The more you prepare, the less painful the review will be • Have a central point of contact • Confirm logistical arrangements
During the audit • Maintain contact with your auditors • The central point of contact will be key in ensuring a smooth audit • Arrange regular catch-up meetings • Understand what the key findings are • Have the auditors got a clear handle on the risks? • Are the key findings valid? • Is the audit on track? • What are the next steps?
What happens next? • How to reap the benefits for your organisation • Ensure that you get to review findings • Draft report stage • Be positive about the findings – Don’t take the outcome as personal criticism • Prepare a plan to address any issues identified and publish it – make sure the plan is implemented! • Roll-out learning points across your organisation, wherever possible • Prepare for your next audit!
Presenter’s contact details Steven Babb KPMG LLP (UK) +44 (0)7717 511 554 firstname.lastname@example.org www.kpmg.co.uk