i) General controls
These are controls, which relate to the environment within which computer-based accounting systems are developed, maintained and operated aimed at providing reasonable assurance that the overall objectives of internal controls are achieved. These controls could either be manual or programmed. The objectives of general controls are to ensure proper development and
implementation of applications and the integrity of program and data files and of computer operations. General controls will include:
a) Systems development controls
b) Organisational controls.
c) Access controls
d) Other controls
ii) Application controls
The objectives of application controls which may be manual or programmed are to ensure the completeness and accuracy of the accounting records and the validity of the entries made therein resulting from both manual and programmed processing.
These relate to the transactions and standing data pertaining to each computer based accounting system and are therefore specific to each such application. With the increasing sophistication of computer operating systems it is becoming more
common for controls to be programmed as part of each application. Application controls are generally divided into:
a) Input controls.
b) Processing controls.
c) Output controls.
d) Controls over master files and standing data.
e) Controls over standing data and master files
Wilfykil answered the question on February 21, 2019 at 10:49
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You have been asked by your firm to examine the payment vouchers of a company to establish the level of errors and then decide whether...
(Solved)
You have been asked by your firm to examine the payment vouchers of a company to establish the level of errors and then decide whether better results can be obtained through statistical techniques.
Required:
a) State the steps you would take in order to test the vouchers for the errors.
b) Why is it not satisfactory to pick vouchers from a limited period?
c) State under what circumstances statistical sampling is a good technique
Date posted:
February 21, 2019
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Answers (1)
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Outline the statutory provisions with regard to duties of external auditors
(Solved)
Outline the statutory provisions with regard to duties of external auditors
Date posted:
February 21, 2019
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Answers (1)
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Explain the value derived from the work of external auditors.
(Solved)
Explain the value derived from the work of external auditors.
Date posted:
February 21, 2019
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Answers (1)
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The director of one of your growing clients have decided to create an internal audit function in their organizational structure
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The director of one of your growing clients have decided to create an internal audit function in their organizational structure
Required:
a) List and briefly describe the duties you would expect the internal audit staff to perform.
b) List and explain the criteria which you would consider before deciding to rely on the work of the internal audit function.
c) State the extent to which you, as an external auditor, can rely on the work of the internal audit function.
Date posted:
February 21, 2019
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Answers (1)
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Describe the various procedures of obtaining audit evidence giving an example of each by way of illustration.
(Solved)
Describe the various procedures of obtaining audit evidence giving an example of each by way of illustration.
Date posted:
February 21, 2019
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Answers (1)
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Explain the meaning of the "audit evidence"
(Solved)
Explain the meaning of the "audit evidence"
Date posted:
February 21, 2019
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Answers (1)
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List six examples of key control questions that would be suitable for inclusion in an ICEQ for a wages accounting system.
(Solved)
List six examples of key control questions that would be suitable for inclusion in an ICEQ for a wages accounting system.
Date posted:
February 21, 2019
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Answers (1)
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Explain how an Internal Control Evaluation Questionnaire (ICEQ) differs from an Internal Control Questionnaire (ICQ).
(Solved)
Explain how an Internal Control Evaluation Questionnaire (ICEQ) differs from an Internal Control Questionnaire (ICQ).
Date posted:
February 21, 2019
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Answers (1)
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Give four merits of using a flowchart to record an accounting system.
(Solved)
Give four merits of using a flowchart to record an accounting system.
Date posted:
February 21, 2019
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Answers (1)
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The auditing standard on subsequent events provide the basic principles and procedures as to the auditor‘s responsibilities and deal with:
i. Dating the auditor‘s report
ii. Audit...
(Solved)
The auditing standard on subsequent events provide the basic principles and procedures as to the auditor‘s responsibilities and deal with:
i. Dating the auditor‘s report
ii. Audit procedures
iii. Events after the date of the audit report.
Required:
a) In the context of subsequent events, what is the significance of the data of the auditor‘s report?
b) Outline the audit procedures considered necessary between the balance sheet date and the date of the auditor‘s report.
c) Summarise the appropriate actions of the auditor regarding events after the date of the audit report.
Date posted:
February 21, 2019
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Answers (1)
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Specialists or experts are occasionally required by external auditors mainly in connection with the valuation assets and the determination of liabilities.
(Solved)
Specialists or experts are occasionally required by external auditors mainly in connection with the valuation assets and the determination of liabilities.
Required:
a) The necessity for reliance on specialist.
b) The extent to which the specialist should be independent?
c) Competence of the specialist.
Date posted:
February 21, 2019
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Answers (1)
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Most errors in computer based accounting systems can be traced to faulty input. Controls over the completeness and validity of all inputs are vital. Control...
(Solved)
Most errors in computer based accounting systems can be traced to faulty input. Controls over the completeness and validity of all inputs are vital. Control over data conversions, controls over rejections and their correction and reprocessing, batch controls and computer edit controls affect both completeness and validity
Required:
a) Explain the controls that can be established over completeness of input.
b) What controls can be established over validity?
c) Programmed edit checks are probably the most familiar input controls and certainly the most effective. Give examples of these controls bringing out clearly:
i. The name of the edit control.
ii. Description of the control.
iii. The objective of the control.
Date posted:
February 21, 2019
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Answers (1)
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Your firm audits Clean Paints Ltd. and you are planning the audit of stock and work in progress for the year ended 31 December 2000....
(Solved)
Your firm audits Clean Paints Ltd. and you are planning the audit of stock and work in progress for the year ended 31 December 2000. Clean Paints Ltd. determines the value of stock in its financial statements by the year -end stocktake. There is no perpetual Stock Inventory System though stock is counted quarterly for the purposes of management accounting
Stock and work in progress is held at the warehouse which is next to the company‘s factory.
Required:
a) State the areas that you will expect the client‘s stocktaking instructions to cover.
b) Describe the work you will perform and the matters you will record at the stock-take attendance.
Date posted:
February 21, 2019
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Answers (1)
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During the course of an audit, the auditor attempts to obtain sufficient relevant and reliable evidence to provide the satisfaction that the financial records are...
(Solved)
During the course of an audit, the auditor attempts to obtain sufficient relevant and reliable evidence to provide the satisfaction that the financial records are completed and accurate. One of the ways that the auditor obtains satisfaction is to select representative samples of transactions and balances for detailed testing, such samples being made using either statistical of non-statistical methods.
Required:
a) Describe the main factors which influence the auditor in determining the size of the sample he will use for his detailed testing.
b) Describe three areas where the judgment will be exercised by the auditor when using statistical sampling.
Date posted:
February 21, 2019
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Answers (1)
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Write in point form an audit programme to cover salary and wages of a small size firm.
(Solved)
Write in point form an audit programme to cover salary and wages of a small size firm.
Date posted:
February 21, 2019
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Answers (1)
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Define the term audit programme.
(Solved)
Define the term audit programme.
Date posted:
February 21, 2019
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Answers (1)
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The matter listed below are always included in the internal control of a firm. You are required to explain the purpose of each of the...
(Solved)
The matter listed below are always included in the internal control of a firm. You are required to explain the purpose of each of the items listed as (a), (b) and (c) below. Indicate the compliance tests you would carry out in order to ensure that the
intended controls were operating properly.
a) A requirement that mail is opened by two responsible employees who must promptly make listings of all receipts.
b) A rule that a fixed asset register must be maintained and updated promptly.
c) A requirement that a bank reconciliation statement is prepared on monthly basis.
Date posted:
February 21, 2019
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Answers (1)
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Working papers provide the audit evidence. They can be categorized into:
i. Auditors‘ prepared working papers.
ii. Client‘s schedules used as working papers.
iii. Audit programmes.
Working papers are...
(Solved)
Working papers provide the audit evidence. They can be categorized into:
i. Auditors‘ prepared working papers.
ii. Client‘s schedules used as working papers.
iii. Audit programmes.
Working papers are then organized into files usually referred to as either current files of permanent files.
Required:
a) What details should each working paper which is prepared by an auditor indicate?
b) What details should each client schedule used as a working paper indicate?
c) What details should an audit programme indicate?
d) With appropriate illustrations, differentiate the use and contents of a permanent file from a current file and write brief notes on the evidence that is provided by working papers.
Date posted:
February 21, 2019
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Answers (1)
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Printa Limited is a large printing company, which has an on-line computer accounting system. The system is based around a central main frame computer, with...
(Solved)
Printa Limited is a large printing company, which has an on-line computer accounting system. The system is based around a central main frame computer, with terminals serving individual departments. As part of the interim audit work, you have been asked to carry out a preliminary evaluation of ;
- The effectiveness of the computer controls over sales and debtors
Required:
Set out the points, which you would raise, in your preliminary evaluation of controls over sales and debtors
Date posted:
February 21, 2019
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Answers (1)
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It has often been said that the auditors‘ report is the formal result of all his efforts. This being the case, it is very important...
(Solved)
It has often been said that the auditors‘ report is the formal result of all his efforts. This being the case, it is very important that the reader well understands the meaning of the Audit Report, particularly where the auditor wishes to qualify his opinion on the financial statements.
Required:
a) Under statutory provision, what are the main contents of the auditors‘ report?
b) Explain how the international standards on auditing attempt to ensure that the report of the auditors is clearly understood.
c) Describe clearly the circumstances in which an adverse opinion and a disclaimer of opinion would be appropriate and give two examples, one each, to illustrate your answer. (A full audit opinion is not required).
Date posted:
February 21, 2019
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Answers (1)