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a) Identify and explain the program controls which are developed to minimize errors in the
processing of records.
• Limit/reasonableness checks
Checks that data falls within predetermined reasonability. limits e.g. hours worked do
not exceed a certain limit, maybe 8 hours a day.
• Missing field check
Checks that ail essential data fields are present and are of the right length
• Edit check
This control is used to verify coding in records and to identify records that are not valid
• Sequence test of the pre-numbered documents
• Master file checks
This ensures that all codes match those on the master file e.g. employee number entered
matches the employee's number in the personnel file
• Document count
Ensures that all documents are input
b) Highlight two types of computer files which are used for the processing of data.
Master file
These contain what is referred to as standing data. They may be the equivalent of ledgers but
may also contain semi-permanent data needed to process transactions e.g. a debtors master file
will be the equivalent of debtors ledger but will also include data that in a manual system may be
kept separately such as invoicing address, discount terms and credit limits, even non-accounting
data e.g. cumulative analysis of sales to that customer.
Transaction Files
Are the equivalents of journals such as the sales journal or the purchases journal or the cashbook.
They -contain details of individual transactions, but unlike books, a transaction file is not a
cumulative record. A separate file is set up for each batch.
c) Summarize the ways in which an auditor could use file interrogation software in the
course of his/her audit work.
• Comparing information on different computer files
• Handling multiple file formats so that files located in different formats are processed
• Carrying out reconciliation of files that are maintained
• File interrogation software can also be used to re-perform calculations
• Detection of duplicated entries in the files
Kavungya answered the question on May 15, 2019 at 08:44
- Analyze the distinguishing features of computer based systems which an auditor must
consider in an audit engagement.
i) Define the term "test data".
ii) Explain three ways of...(Solved)
Analyze the distinguishing features of computer based systems which an auditor must
consider in an audit engagement.
i) Define the term "test data".
ii) Explain three ways of using test data in an audit.
Date posted: May 15, 2019. Answers (1)
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b) Argue the case for and against a company outsourcing its electronic data processing to...(Solved)
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b) Argue the case for and against a company outsourcing its electronic data processing to a
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Date posted: May 15, 2019. Answers (1)
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Outline six benefits that could be derived from using Computer Assisted Audit techniques.
(CAATs)
Date posted: May 15, 2019. Answers (1)
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Identify six controls that could be instituted in a new computer based accounting system to
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Date posted: May 15, 2019. Answers (1)
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Explain six ways in which audit software could be used in an audit.
Date posted: May 15, 2019. Answers (1)
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the purchases ledger by the purchases department. The computer subsequently raises a...(Solved)
Jikaze Limited operates a computerised purchases system. Invoices and credit notes are posted to
the purchases ledger by the purchases department. The computer subsequently raises a cheque
when the invoice is due for payment.
Required:
Describe five controls that should be in operation over the addition, amendment and deletion or
suppliers in the computer system.
Date posted: May 15, 2019. Answers (1)
- a) During an audit. the auditor uses a combination of compliance tests or control, analytical
procedures and detailed substantive procedures. When the information system is computer
based,...(Solved)
a) During an audit. the auditor uses a combination of compliance tests or control, analytical
procedures and detailed substantive procedures. When the information system is computer
based, the detailed tests involve the use of manual techniques and computer audit
programs.
Required:
Explain three manual techniques that an auditor could use in the audit of a computer based
information system.
(b) An audit trial can be described as a series of cross-references that enable the auditor to
Follow a transaction from cradle to grave and vice versa and to check the operations
performed at each stage of processing.
The transformation from manual accounting systems to fully computer based information
systems has led to the loss of audit trail such that audit trials are often now:
• Available in machine readable form only or
• Retained only as long as is necessary for the system to verify the transaction.
Required:
Explain the different ways auditors overcome these problems of loss of audit trail.
Date posted: May 15, 2019. Answers (1)
- Briefly explain the following types of audit software
i) Generalised audit software.
ii) Purpose written programs.
iii) Utility programs.(Solved)
Briefly explain the following types of audit software
i) Generalised audit software.
ii) Purpose written programs.
iii) Utility programs.
Date posted: May 15, 2019. Answers (1)
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Summarise ten benefits that could accrue to the auditor from automating audit procedures
Date posted: May 15, 2019. Answers (1)
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accounting records. They relate to procedures used to initiate, record, process and report
transactions...(Solved)
Application controls in confirmation technology are designed to ensure the integrity of the
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Date posted: May 15, 2019. Answers (1)
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b) Describe three disadvantages of using live data testing(Solved)
a) Define the term "live data" as used when auditing through the computer.
b) Describe three disadvantages of using live data testing
Date posted: May 15, 2019. Answers (1)
- a) Discuss. four matters that an auditor should take into consideration in determining
whether or not to use Computer Aided Audit Techniques (CAATs).
b) Describe three practical...(Solved)
a) Discuss. four matters that an auditor should take into consideration in determining
whether or not to use Computer Aided Audit Techniques (CAATs).
b) Describe three practical ways in which auditors might use laptops in the audit work. .
c) Explain three controls that auditors should implement when using laptops during audits.
Date posted: May 15, 2019. Answers (1)
- a) Distinguish between "vouching" and "verification".
b) Outline the audit procedures you would carry out to verify the following items
appearing in the financial statements of a...(Solved)
a) Distinguish between "vouching" and "verification".
b) Outline the audit procedures you would carry out to verify the following items
appearing in the financial statements of a client:
i) Cash in Hand,
ii) Loan to an employee.
iii) Fire insurance premium on factory building,
iv) Sales commission paid to an agent.
Date posted: May 15, 2019. Answers (1)
- a) During the audit of cash in bank, an auditor should seek to obtain standard bank
confirmations from each-hank with which the client conducted business during...(Solved)
a) During the audit of cash in bank, an auditor should seek to obtain standard bank
confirmations from each-hank with which the client conducted business during the period
under audit.
Required;
i) Explain the importance of an auditor obtaining confirmations from the client's bank.
ii) Outline the steps followed by an auditor when obtaining confirmations from the
client's bank.
b) Describe the audit procedures an auditor would carry out when verifying a client's bank
reconciliation.
Date posted: May 14, 2019. Answers (1)
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"An auditor i:., required to use assertions for classes of transactions, account balances and
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of material .misstatement and the design:and performance of further audit-procedures"'.
Required:
Identify the assertions used by auditors in the following categories:
i. Assertions about account balances at the period end
ii. Assertions about presentation and disclosure.
Date posted: May 14, 2019. Answers (1)
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Summarise the audit work you would undertake to obtain reasonable assurance that the
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i. Specific allowance for doubtful debts.
ii. Trade payables.
Date posted: May 14, 2019. Answers (1)
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Explain how an auditor would carry out the verification of cash at bank.
Date posted: May 14, 2019. Answers (1)
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evidence that the auditor would rely on.
i. Land
ii. Rent expenses
iii....(Solved)
For each of the following items in the financial statements, identify hvo.forins of third party
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Date posted: May 14, 2019. Answers (1)
- Highlight six audit procedures that you would carry out to verify an acquisition of plant worth
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Highlight six audit procedures that you would carry out to verify an acquisition of plant worth
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Date posted: May 14, 2019. Answers (1)
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a) Argue the case for carrying out risk analysis during an audit
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Date posted: May 14, 2019. Answers (1)