Information system and communication
The information system relevant to financial reporting includes how information is initiated, recorded, processed, corrected and reported, and how responsibilities and significant matters are communicated. The auditor considers both manual and automated aspects. The auditor considers transaction flows, relevant accounting records, supporting information, journal entries and how significant reporting matters are communicated. An understanding helps identify where misstatements may arise and which controls are relevant to the audit.
Worked example
The sales system records orders, dispatches, invoices and receipts and transfers totals to the general ledger.
Common mistake
An automated ledger does not eliminate risks from incorrect inputs, interfaces or access rights.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |