Due Diligence is the process of investigating and auditing a prospective business decision by gathering information about the financial, legal, and other material (important) status of an entity and the issue of a report on findings.
Due diligence is used commonly when buying a business, as the buyer engages his auditors to go through the financial situation of the business, legal obligations, customer records, and other documents to give the buyer peace of mind or warn of potential pitfalls.
We almost always advise our clients to perform a due diligence when investing a material amount of money. If you don’t perform a “due diligence” in a business situation, you may end up buying something that isn’t as you thought it was, or you may end up in a business relationship that will cause you trouble. It can be costly to perform a due diligence, because it involves professional time of a Chartered Accountant (and sometimes attorneys), but we believe it`s certainly worth the trouble.
The use of IT affects the fundamental manner in which transactions are initiated, recorded, processed, and reported. When an organisation utilises Information Systems effectively then such company’s control environment would have automated procedures implemented to initiate, record, process, and report critical financial transactions. In such scenarios, a company could potentially maintain electronic records and may replace such paper documents as purchase orders, invoices, shipping documents, and related accounting records.
Controls in systems that use IT, consist of a combination of automated controls (for example, controls embedded in computer programs) and manual controls. Further, manual controls may be independent of IT, may use information produced by IT, or may be limited to monitoring the effective functioning of IT and of automated controls, and to handling exceptions. An entity’s mix of manual and automated controls varies with the nature and complexity of the entity’s use of IT.
It is essential for the members of BoD, Executive Management, Internal Auditors and External Auditors to gain assurance over the integrity, accuracy, timeliness and completeness of the transactions that are processed within a complex environment.
Lockhat Incorporated understands the criticality of the financial reporting process from a transactional standpoint and also has the experience to decipher the underlying pervasive controls related to Information Technology.
Our services include performing various types of EDP / IT Audits including:
- General IT Administration & Governance audits
- Application Development, Maintenance and Change Control audits
- Networks & Telecommunications controls audits
- Operating Systems and Hardware Maintenance & Support audits
- Production Operations & End User Computing audits
If you are considering an IT Audit or any other specific Application Audits, give us a call so that one of our partners can provide you with trusted advice.