Income audit is an audit exercise that focuses on recovery of lost income due to improper processing of financial transactions by users or defects in the business application.
Improper processing of financial transactions can result from either deliberate attempt by users to avoid collecting charges on certain transaction or genuine error on the part of users. Experience has shown that in most cases, non-collection of charges on processed financial transactions is as a result of genuine error/knowledge gab on the part of the users.
On the other hand, income leakages as a result of defects in the Business Application usually occur when income parameter files of a business application are wrongly set up or when the system malfunctions resulting into COT, interest and commissions not being charged on some accounts as at when due. These omissions might not be noticed immediately and can go on undetected. Many organizations are losing hundreds of millions of Naira annually as a result of these irregularities.
It requires the skills of experienced auditors with IT and financial audit background to carry out effective income audit in an organization. IT audit skill will be used to develop scripts/programs that are required to audit the business application while the financial audit skill will be used to analyze information obtained and make reasonable deductions.
BENEFITS OF INCOME AUDIT
The major benefits of income audit are:
MAJOR HIGHLIGHTS OF THE INCOME AUDIT