CHAPTER ONE
INTRODUCTION
1. Background of the study
According to Fadzil et al (2005), the technology revolution in accounting and auditing began in the summer of 1954 with the first operational business computer. General electric is attributed with the first operational electric accounting system, a UNIVAC computer, in the summer of 1954. Hunton and Wright (2009) concur that Information Technology Auditing (IT Auditing) began as Electronic Data Process (EDP) auditing and developed largely as a result of the rise in technology in accounting systems, the need for IT control, and the impact of computers on the ability to perform attestation services. It is believed the first use of a computerized accounting system was at General Electric in 1954. At this time only mainframe computers were used and a few people had the skills and abilities to program computers. This began to change in the mid-1960s with the introduction of new, smaller and less expensive machines. This increased the use of computers in businesses and with it came the need for auditors to become familiar with EDP concepts in business. Jones and Young (2006) point out that EDP auditors formed the Electronic Data Processing Auditors Association (EDPAA).
The goal of the association was to produce guidelines, procedures and standards for EDP audits. In 2007, the first edition of control Objectives was published. This publication is now known as Control Objectives for information and related Technology (CobiT) is the set of generally accepted IT control objectives for IT Auditors. In 2004, EDPAA changed its name to Information Systems Audit and Control Association (ISACA). The period from the late 1960s through today has seen rapid changes in technology from the microcomputer and networking to the internet and with these changes came some major events that change IT auditing forever. According to Griiths (2006), the accounting industry is responsible for recording and reporting financial information for business. Accounting functions generally fall in to one of two accounting categories: management and financial. Where management accounting is responsible for recording and reporting internal financial information for managers for business decisions, financial accounting reviews company’s information released to external business stakeholders. Jackson (2005) suggested that taking comprehensive measures for protecting financial information often helps companies pass external audits with positive audit opinions. External audits may be used by banks, lenders or investors deciding to invest capital into the company.
Leave a Reply
You must be logged in to post a comment.