What are Audit Objectives?

Audit objectives are associated with the audit of financial statements. Audit objectives are intended to obtain reasonable assurance that the financial statements are free of material misstatements, and to issue a report on those financial statements based on the findings resulting from the audit. The primary objectives associated with an audit fall into these classifications:

Assess the client’s internal controls. The auditor needs to understand the effectiveness of the client’s system of internal controls. This analysis is designed to detect any weaknesses that could increase the risk of material misstatements in the client’s financial statements.
Detect fraud and errors. The auditor has a responsibility to detect instances of material fraud and errors while conducting the audit. This calls for the use of additional audit procedures to spot and investigate unusual transactions and variances.
Comply with regulations. The auditor must consider the extent to which the client is complying with all applicable laws and regulations. This includes an analysis of whether the client has systems in place to ensure compliance, as well as to determine whether any cases of non-compliance will have an impact on its financial statements.
Develop an audit opinion. The auditor must develop an opinion concerning the accuracy, completeness, and fairness of the client’s financial statements. This requires an assessment of whether these statements have been prepared in accordance with the applicable financial reporting framework, such as GAAP or IFRS, and whether the statements accurately reflect the financial performance, financial position, and cash flows of the client.

If these objectives cannot be met, then the auditor must either disclaim an opinion or withdraw from the engagement. An auditor should examine the objectives at regular intervals throughout an audit, and decide whether the results to date will allow them to be met.

What are the Objectives for an IT Audit?

The ongoing auditing of IT is an essential activity, for it identifies holes in systems that can be used to illegally extract data from a business, as well as to corrupt its systems. Locating these potential issues is critical, since plugging them could keep a business from losing its trade secrets, or from having essential systems go down. Consequently, the purpose of IT auditing involves two tasks, which are the initial identification of problems and the subsequent reporting of these findings to ensure that they are fixed. Ideally, the outcome should be not just the reporting of identified problems but also the improvement of the underlying systems.

Examples of the audit objectives that might be used for an IT audit include the following:

Verify whether software controls are being followed
Verify whether access to the server room is restricted
Verify whether the IT infrastructure supports the strategic plan
Verify whether user access to application programs is being logged
Verify whether employee access to IT systems is terminated when they leave the company