What Are IT Audits And When Do You Need One?

Organisations have gone all in for cloud technology. Entire functions are being migrated onto cloud platforms and services. Even small businesses operate on an ecosystem of different cloud-based applications.

But while these advances have unlocked unprecedented efficiency and computing power for businesses, it has also created an increasingly tangled web of applications, databases, and controls. And the picture is only bound to grow murkier. Businesses are expected to spend one hundred billion dollars on cloud services by the end of 2023, according to Gartner.

Companies small and large will be facing an uphill battle for visibility and governance. In the coming years, one process will be crucial for staying on top of your IT spend, infrastructure, and security: IT audits.

What are IT Audits?

Most organisations are intimately familiar with the process of auditing. In the UK, all companies are legally mandated to conduct financial audits, with only a handful exemptions for the smallest entities.

IT audits operate on the same principle. Yet instead of validating the veracity of financial accounts and activities, IT audits investigate and evaluate whether existing security protocols and controls sufficiently protect a company’s assets and data. It also assesses whether information systems are still working effectively towards an organisation’s objectives.

Advantages of IT Audits

Strengthens Security

Improved security is arguably the biggest benefit you can get from an IT audit. An IT audit enables businesses to take on new technologies while mitigating vulnerabilities that arise with every new application or process that you integrate into operations.

Reduces Operational Inefficiency

With the plethora of tools at a company’s disposal, it’s easy to think most companies have cracked the code for maximising productivity using technology. But that’s often not the case. Many companies still bleed money and resources on clunky tools and workflows. IT audits help by identifying inefficient practices, redundancies, and processes that may no longer be creating value for your business.

Guarantees Compliance

Complacency is a greater risk to companies in the UK than hackers, according to the Information Commissioner’s Office (ICO). Yet with pages of guidelines and regulatory bodies to follow, compliance can be hard to track–and steep fines, easy to incur. IT audits make compliance less of a headache by assessing if a company is doing enough to meet standards and identifying potential violations.

IT Audits Types

The use of computers for business is a fairly modern development. It wasn’t until the mid-seventies that their use for accounting work became widespread enough to necessitate the creation of a specialised audit.

The scope of today’s IT audits has grown exponentially, faster than language has been able to give it a standardised taxonomy. In 1993, Richard Goodman and Michael Lawless published Technology and Strategy, one of the first textbooks to comprehensively discuss strategy and methodologies for technology management in relation to a company’s operations.

In it, Goodman and Lawless divided IT audits into three categories, which still apply today:

Technological Innovation Process Audit

A Technological Innovation Process Audit looks at the process behind innovation and product development. Auditors create a risk profile for each project, identifying strengths and weaknesses.

Innovative Comparison Audit

An Innovative Comparison Audit compares an organisation’s innovation capabilities to competitors. It involves assessing a company’s facilities as well as their history of developing new products and services.

Technological Position Audit

A Technological Position Audit evaluates the technologies a business is using, and how they contribute to business objectives. Part of the audit is revealing new types of technologies that can help achieve goals.

These three are only some examples of IT audits, and are by no means definitive. Auditing companies can offer other types that extend beyond process and innovation, such as the following:

IT Security Audits

Security is perhaps the IT audit most companies are familiar with, as these types of audits are becoming more indispensable in the face of mounting regulations and evolving cybercriminal activity. During this type of audit, auditors look for loopholes using simulated attacks–a process commonly known as pentesting. The audits also include checking access controls, the health of backups and backup systems, and whether all connected devices are patched and up-to-date.

Systems and Applications Audit

This type of audit looks at the software applications used for a certain business function. It evaluates whether the controls in place can aptly manage access to business-critical information. It also evaluates factors such as implementation, the interaction of the application with other applications, and the efficiency and logic by which data is processed and travels through the system.

Telecommunications & Client/Server Audit

A telecommunications audit focuses on the foundation of operations: the network connecting your devices, including intranets and extranets. Auditors evaluate the efficiency of telecommunication configurations and the strength of client/server connections to ensure that data is being communicated and exchanged quickly and completely.

Cloud Vendor Audit

With billions being poured into cloud services, cloud vendor audits are integral for making sure a company is getting what they’re paying for. Cloud vendor audits assess the performance of third-party providers, looking at how they’re fulfilling Service Level Agreements (SLAs) and sticking to agreed upon controls and security protocols.

The IT Audits Process

Factors like budget, milestones, and goals may change, but audits generally follow the same process.

First, the planning stage. During this phase auditors and companies work to put together the budget, scope, timelines, and goals of the audit. Auditors are also given the resources they’ll need to do the work, such as login specifications to the assets they need to test and examine. Precision and clearly delineated specifications are crucial, as it’ll ensure an audit stays within budget and disruptions to operations are kept to a minimum.

Then comes the actual audit. This phase usually begins with auditors observing the systems and controls at work. Next comes testing and assessment, after which auditors will create documentation of their findings and provide recommendations for improvement.

Some audits end after deliverable reports have been turned in to the company. But many others continue onto a follow-up stage, where auditors revisit and re-evaluate systems after a specific period to check whether recommendations have been implemented properly and are working as expected.

Technology is the cornerstone to most–if not all–critical business functions. Whether you’re generating sales leads or developing new products, you will be relying on your IT infrastructure to achieve your goals.

In such an environment, IT audits are only bound to become as significant to businesses as financial audits. If you’re looking for IT experts who can conduct comprehensive and actionable audits, book a free consultation with Evolvit today.