Information system relevant to financial reporting
The information system relevant to financial reporting is a component of internal control that includes the financial reporting system, and consists of the procedures and records established to initiate, record, process and report entity transactions and to maintain accountability for the related assets, liabilities and equity [BPP Learning Media, p.276].
Information systems consist of infrastructure (physical and hardware components), software, people, procedures and data. Where systems are primarily manual, the IT infrastructure will be less significant or non-existent. The information system relevant to financial reporting consists of the procedures and records established to initiate, record, process and report entity transactions, events and conditions, and to maintain accountability for the related assets, liabilities and equity. The quality of the information system is critical to ensuring that material misstatements are prevented or detected and corrected timeously [Puttick,p.398].
Puttick, G., Kana, S. (2008). The Principles and Practice of Auditing. South Africa: University of Cape Town.
BPP Learning Media. (2012). FIA Foundations in Audit. United Kingdom: British Library Cataloguing-in-Publication Data.