External Auditing

External Auditing

Week 5 Homework

12-17

a. Technologies reduce some types of risks while introducing new types of risks to be managed

b. Controls that determine whether a vendor number matches the pre-approved vendors in the vendor master file

c. Expand testing of automated application controls used to reduce control risk to cover greater portions of the fiscal year under audit

d. The sales system automatically computes the total sale amount and posts the total to the sales journal master file

12-18

a. A system that performs relatively uncomplicated processes and produces detailed output

b. Completeness of sales transactions

c. Completeness of input

12-27

Recommendations or suggestions to improve Harwood's information systems:

1. Personnel information systems should be assigned to one department only.

2. READ, RUN, CHANGE applications should not be available to all employees, some control is essential on this applications.

3. TV screen should be live and recorded.

4. The librarian should only have READ privileges.

5. Files stored shelves should not be near computer room.

6. Label or titles don't attach to outside cartridge. Also, he can write on cartridge box if he wants.

13-22

a. Test of control

b. Relative effectiveness and efficiency of tests

c. Substantive tests

13-23

a. Include observations of the proper segregation of duties

b. Test of controls

c. A reasonable degree of assurance that internal controls are operating effectively and consistently throughout the year

d. Reperformance

13-24

1. A. Test of details of balances B. Internal documentation

2. A. Substantive test of transactions B. Confirmation

3. A. Substantive test of transactions B. Reperformance

4. A. Analytical procedures B. External documentation

5. A. Analytical procedures B. Confirmation

6. A. Test of controls B. Internal documentation

7. A. Substantive test of transactions B. External...