Software Audit: Definition, Checklist and Comprehensive Guide

Software audit is a crucial routine checkup process to ensure your software’s health, safety, and compliance. By the end of this article, you will own a comprehensive handbook, covering from the most basic to the most complex knowledge surrounding software audits, offering valuable insights, best practices, and expert guidance to optimize your software assets and stay ahead in the ever-evolving technology industry. Let’s get cracking!

 

What Is Software Audit?

A software audit is a comprehensive process of examining a company’s software apps, systems, and licenses, performed by either an internal or external team, to ensure its compliance with legal requirements, industry standards, and other organizational policies. 

During this process, to identify vulnerabilities, mitigate risks, and provide solutions for enhancing the software’s effectiveness, the software auditor will analyze various factors, including:

• License agreements
• Usage patterns
• Number of software app installations
• Potential instances of unauthorized or unlicensed software

 

There are three common methods for conducting the software auditing program:

• Internal audit software: The auditing software process is implemented by the in-house team regularly. This approach is best suited for businesses with well-established internal software audit processes and professionals possessing profound knowledge of the company’s software systems and structures.
• Third-party auditing software vendor: Software development companies contract with an external team to provide independent examination. This method is ideal for companies opting for an objective and unbiased evaluation.
• Collaborative software audit approach: This involves a collaboration of both internal and external auditing software teams. This method is highly recommended for complex audit projects that require a well-rounded evaluation, combining the internal team’s familiarity and the external team’s objective perspective.

Each method has its pros and cons that only help it shine in a specific scenario. To make an informed decision, your organization should consider your internal team’s capabilities and software audit goals.

 

Key Benefits of Auditing Software

According to Technavio’s latest report, “Audit Software Market – Forecast and Analysis 2023-2027”, the audit software market is calculated to increase at a CAGR of 13.36% between 2022 and 2027.

This outstanding growth in the market indicates that auditing software has substantial benefits to bring to the table. Let’s check out the significant advantages of performing software audits.

 

Effective license compliance management

Auditing software is vital for ensuring your software apps comply with licensing agreements and avoiding the risks of legal consequences and financial penalties. 

When running a software application, businesses may struggle with keeping track of multiple licenses, subscriptions, and third-party integrations. Inactive licenses will damage your budget while using outdated ones can cause legal issues.

Regular auditing software allows your organization to:

• Avoid unnecessary expenses by identifying and removing outdated or unused licenses, and inactive subscriptions.
• Maximize software usage by identifying the current license state.
• Avoid legal issues by addressing outdated license contracts and deciding to extend or terminate them instantly.

 

Optimized software’s performance and quality

Auditing software is akin to a “health checkup” for your digital software applications. This process examines the software’s performance, addressing bottlenecks, and identifying areas for improvement.

At the nascent stage, regular software audit has a significant role to play in accelerating project delivery as developers can quickly detect flaws and adjust code with little to no negative influence on the whole system. Meanwhile, frequent audits during the normal operation of the software can give the development team an upper hand in optimizing software performance and eliminating inefficiencies with a view to smoothening user experience.

A comprehensive auditing software process allows you to address code quality issues, ensuring your software meets industry code standards, and reduces risks of bugs, ultimately leading to sustainable success. 

 

Enhanced software security measures

Auditing software enables you to address your software’s security vulnerabilities. With early risk identifications, you can have an instant strategy to consolidate your digital defenses, thereby safeguarding sensitive data and eliminating cybersecurity threats. 

In essence, auditing software acts as a proactive approach that protects your organization and improves customer trust.

 

Cost efficiency

With a well-rounded auditing software strategy, your organizations can acquire valuable insights into your software status regarding license and subscription state, usage patterns, etc. Based on the situation and context, you can optimize your budget by reducing unwanted expenses for overdated licenses, reallocating resources effectively, and renewing license contracts based on actual demands. 

In addition, this insight enables you to make data-driven decisions for software upgrades, future investments, and emerging tech stack adoption. It empowers tech leaders not only in aligning technology initiatives with business goals, but also in creating software that meets the industry standards, drives innovation, and enhances competitive edge. 

 

When Should You Perform a Software Audit?

Every software app and system requires regular auditing software to ensure the software’s health, security, and compliance. The software audit should be a regular task for a business. The recommended frequency is once or twice a year. 

However, auditing software brings the most benefits and plays an important role in the software development life cycle when it comes to the following situations:

• When the software shows slow performance or no responsive
• When the software requires updates and new solutions after a long time
• When the software stops working as intended due to some security risks and needs instant issues identification for improvement
• When the need to reduce the budget arises
• Before deploying or launching software for end users
• When considering purchasing a software product and you want to review the product’s quality and performance

 

Common Audit Software Types 

Depending on the software audit program’s specific goals, there are different types of software audits.

 

Software quality audits

As the name speaks for itself, software quality audit examines the quality aspects of software products. The software auditors will verify if your software apps and systems are up to date and function as intended. 

In addition, software auditors will address bottlenecks, and room for improvement, and then recommend alternative solutions. This type of software audit is to assure that your software apps deliver flawless user experience and comply with the latest industry trends and standards.  

 

Software security audits

A software security audit is essential for every software product, particularly in this era when cyber attacks have become increasingly commonplace.

Auditing software helps organizations take necessary precautions, and build digital defenses like malware protection, firewalls, SSL-encrypted data transmission, etc to safeguard their software from data breaches, security attacks, and other issues. 

Software security audits might include conducting penetration tests, web app security tests, third-party application and integration security testing, etc.

Learn more about the differences among black box, grey box and white box penetration testing.

 

Software’s usability and accessibility audit

Ease of access and use determine your software’s success. Therefore, a usability and accessibility audit is vital before releasing your software to the market.

With a comprehensive software audit, auditors can address common issues like confusing onboarding, and overly complicated features, leading to awful user experience, and high bounce rates.

This software audit might include performing user flow analysis, heuristic evaluation, UI/UX test, etc.

 

How to Audit Software

 

Before auditing software

How to stay well-prepared before conducting the software audit? The preparation phase will set the foundations of the software audit project and determine its success. This phase involves the following steps:

• Identify the software audit’s goals: Clearly define the final objectives of the auditing software, whether it is to enhance software’s performance, ensure software compliance, or optimize costs.
• Develop software inventory: Create a comprehensive inventory of all installed software across your organization, including information on current licenses, usage, subscriptions, and software versions.
• Review existing software state: Evaluate all the current licensing agreements and compliance standards of your software to ensure that the audit aligns with legal requirements, eliminating oversights during assessment.
• Find the right auditing software vendor: If you opt for an external team to conduct your software audit, ensure you select a reputable vendor by evaluating carefully their experience, auditing tools, and expertise in the relevant domain.
• Assign roles and responsibilities: Clearly define responsibilities for each team member involved in the audit, such as data collection, data analysis, etc.

 

During the software audit process

To conduct an effective auditing software, this phase involves the following essential steps:

• Collect data automatically: Utilize automation tools to effectively and accurately scan and gather data from the entire system, including installed software, licenses, etc.
• Compare collected data with inventory list: Compare and identify any inconsistencies, then investigate the reasons, to ensure up-to-date information.
• Verify software licenses: Assess software license compliance, ensuring no overuse or underuse that could lead to unnecessary expenses or non-compliance.
• Assess software usage patterns: Analyze the current software usage, and identify overuse or misuse licenses to make necessary adjustments for improved software efficiency and compliance.
• Set up the audit: Create the audit infrastructure by defining the necessary audit parameters, and tools that align with the audit’s goals.
• Maintain communication with departments: Establish open communication channels and methods with involved departments, ensuring a transparent and collaborative audit process.

 

After the software audit process

This phase concentrates on synthesizing and analyzing results and establishing an ongoing improvement cycle. It involves the following steps:

• Collect detailed audit report: Compile audit results in a comprehensive report that provides detailed insights for stakeholders for future strategic decision-making.
• Conduct corrective actions: Based on the audit results, implement necessary corrective actions, involving uninstalling unauthorized software, modifying software usage patterns, and getting additional licenses.
• Update software inventory: Ensure that your software license and inventory are up-to-date, maintaining accurate records and eliminating discrepancies in future audits.
• Establish ongoing improvement strategy: Design a system for continuous monitoring, including setting up automated tools, regular checkpoints for compliance assessment, and revising policies.

 

Software Audit Checklist

A auditing software checklist is a useful guide for any internal or external audit team who are new to the process of software audit, ensuring no overused or misused steps. Here is a checklist for conducting a software audit:

• Clearly define objectives and scope to guide the auditing software process effectively
• Establish a well-structured auditing and testing plan for your software audit process, covering the specific timelines, sequence of tasks, and person in charge of each task, etc
• Compile a comprehensive inventory list of installed software, including detailed information like name, version, license type, installed date, and vendor information.
• Verify the licensing compliance, and identify any unauthorized software
• Examine the security measures, and address software vulnerabilities
• Review the contracts with external software audit vendors and other involved stakeholders to ensure compliance with terms for both sides
• Ensure that all the software apps are updated with the newest patches, and create a strategy for instant vulnerability mitigation
• Ensure your software usage patterns align with the organization’s policies and comply with the industry’s standards and requirements
• Evaluate and identify unnecessary software that might cause unwanted expenses to ensure cost-effectiveness
• Keep detailed and accurate documents and records of the audit process, including issues, actions taken during the assessment, etc
• Create a comprehensive report summarizing audit results and suggest actionable solutions for improvement

 

Software Audit Report: What Should Be Included?

An auditing software report is a comprehensive document that provides a summary of the audit findings, issues discovered, recommended improvement solutions, and plans for the next audit. 

A general outline of a software audit might include the following common factors:

• Audit project overview: Summary of the audit, including key findings and recommended solutions for improvements.
• Audit project introduction: A brief and clear summary of the auditing’s objectives and scope.
• Audit methodology: Provide information about the tools, methods, and technologies used during the software audit.
• License compliance: Present a detailed report and analysis of the current software license state.
• Usage pattern: Assess and provide detailed software usage statistics against the licensing agreements.
• Software inventory assessment: Create a comprehensive inventory of all the software assets, including information regarding version, installed dates, etc
• Cost analysis: Calculate and estimate the overall budget of the software auditing project, and provide recommendations for optimizing the expenses.
• Conclusion: Provide the overall key findings, and outline the steps for the next auditing software process.

 

Frequently Asked Questions About Software Audit

1. What is audit software?

Software audit is the process of assessing, examining, and evaluating a software app to ensure its compliance with licensing agreements, define potential risks, and offer optimization solutions. This process can be conducted by an internal or external software auditor team.

 

2. Why regular software audit is important to your business?

Regular auditing software bring numerous advantages to your organization. It helps ensure that your software complies with its licensing agreements, avoiding legal and financial issues. Additionally, it allows your organization to optimize the software’s performance by detecting vulnerabilities, optimizing software usage, and providing recommendations for improvements. Lastly, regular auditing software bring cost-effectiveness by addressing overused, and unused software licenses and eliminating unwanted expenses.

 

3. How to audit software?

Conducting a software audit project involves the following essential steps: creating a software inventory list, evaluating security aspects, assessing licensing compliance, reviewing vulnerabilities, and offering optimization solutions. Documenting the entire auditing process is vital, including all the actions, findings, and suggestions. In essence, you should establish tailored software audit plans, including before, during, and after the process, aligning with your business’s goals and resources. 

 

Final Thoughts About Audit Management Software

Software audit is a paramount process in every software development life cycle. It ensures that your software products comply with the license agreements, meet the industry standards, and align with the business requirements. A well-executed auditing software enables your organization to enhance efficiency, optimize budget, and eliminate risks. 

With our comprehensive auditing software guide and checklist, you can have the best practices, and customize your own auditing software plans. LTS Group is a leading IT Outsourcing provider in Vietnam with extensive expertise in software development and software qualification assurance across platforms, devices, and industries. With 7+ years of experience, we ensure to provide you with a comprehensive and effective strategy for examining your software. Feel free to contact us for valuable insights, expert advice, and a roadmap to optimize your software audit strategy.

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