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• The standing data file containing suppliers' details should have controls that prevent fraud
through creation of fictitious suppliers.
• All amendments/additions/deletions to the data should be authorized by a responsible
official. A standard form should be used for such purposes.
• The amendment forms should be input in batches (with different types of change in
different batches). sequentially numbered and recorded in a batch control book so that
any gaps in the batch numbers can be investigated. The output produced by the computer
should he checked to input.
• A listing of all such adjustments should automatically be produced by the computer and
reviewed by a responsible official who should also check authorization.
• A listing of suppliers' accounts on which there has been no movement for a specified
period should be produced to allow decisions to be made about possible deletions, thus
ensuring that the standing data is current. The purchase manager might also recommend
account closures on a periodic basis.
• Users should be controlled by use of passwords. This can also be used as a method of
controlling those who can amend data.
Periodic listings of standing data should be produced in order to verify details for
example addresses with-suppliers' documents/invoices/statements.
Kavungya answered the question on May 15, 2019 at 08:34
- 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)
- Summarise ten benefits that could accrue to the auditor from automating audit procedures(Solved)
Summarise ten benefits that could accrue to the auditor from automating audit procedures
Date posted: May 15, 2019. Answers (1)
- Application controls in confirmation technology are designed to ensure the integrity of the
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
accounting records. They relate to procedures used to initiate, record, process and report
transactions or other financial data.
Date posted: May 15, 2019. Answers (1)
- a) Define the term "live data" as used when auditing through the computer.
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)
- "An auditor i:., required to use assertions for classes of transactions, account balances and
presentation and disclosure in sufficient detail in order to form a basis...(Solved)
"An auditor i:., required to use assertions for classes of transactions, account balances and
presentation and disclosure in sufficient detail in order to form a basis for the assessment of risks
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)
- Summarise the audit work you would undertake to obtain reasonable assurance that the
following items appearing the Statement of financial position of a client are not...(Solved)
Summarise the audit work you would undertake to obtain reasonable assurance that the
following items appearing the Statement of financial position of a client are not materially
misstated:
i. Specific allowance for doubtful debts.
ii. Trade payables.
Date posted: May 14, 2019. Answers (1)
- Explain how an auditor would carry out the verification of cash at bank.(Solved)
Explain how an auditor would carry out the verification of cash at bank.
Date posted: May 14, 2019. Answers (1)
- For each of the following items in the financial statements, identify five forma of third party
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
evidence that the auditor would rely on.
i. Land
ii. Rent expenses
iii. Motor vehicles
Date posted: May 14, 2019. Answers (1)
- Highlight six audit procedures that you would carry out to verify an acquisition of plant worth
Sh.2 million during the financial year.(Solved)
Highlight six audit procedures that you would carry out to verify an acquisition of plant worth
Sh.2 million during the financial year.
Date posted: May 14, 2019. Answers (1)
- a) Argue the case for carrying out risk analysis during an audit
b) Describe eight procedures for audit of inventory(Solved)
a) Argue the case for carrying out risk analysis during an audit
b) Describe eight procedures for audit of inventory
Date posted: May 14, 2019. Answers (1)
- Describe the audit work that should be carried out by an auditor on suppliers invoices in the
course of auditing purchases.(Solved)
Describe the audit work that should be carried out by an auditor on suppliers invoices in the
course of auditing purchases.
Date posted: May 14, 2019. Answers (1)
- a) List four audit .procedures you would perform on credit notes issued to customers upon
return of goods
b) Explain why it is important for an auditor...(Solved)
a) List four audit .procedures you would perform on credit notes issued to customers upon
return of goods
b) Explain why it is important for an auditor to send a bank letter to his client's bank.
c) Summarize any six procedures that are undertaken by an auditor while obtaining
confirmation from a client's bank.
Date posted: May 14, 2019. Answers (1)
- Briefly explain the following terms.
i) Analytical procedures
ii) Audit opinion.
iii) Audit working papers(Solved)
Briefly explain the following terms.
i) Analytical procedures
ii) Audit opinion.
iii) Audit working papers
Date posted: May 14, 2019. Answers (1)
- Choose the most reliable source of evidence from the two options given in each of the following
scenarios:
i) A bank reconciliation prepared by the Senior Chief...(Solved)
Choose the most reliable source of evidence from the two options given in each of the following
scenarios:
i) A bank reconciliation prepared by the Senior Chief Accountant of XYZ Ltd. or, A
bank confirmation received from a small branch of Zed Bank Ltd; bankers of XYZ
Ltd.
ii) Negative circularization received directly by the client from a major debtor of XYZ
Ltd. or; Positive circularization received directly by the auditor from a debtor with
respect to a debt that had earlier been written off.
iii) A logbook that shows vehicle registration number NEB 201 is registered under the
ownership of the CEO of XYZ Ltd. or; An oral representation by the CEO of XYZ
Ltd. assuring you that the car is owned by XYZ Ltd.
iv) An LPO drafted by the Storekeeper of XYZ Ltd who has been procuring goods for
XYZ Ltd. for the past ten years or;
A Goods Received Note generated by the storekeeper and signed by the supplier upon delivery
of goods.
Date posted: May 14, 2019. Answers (1)
- a. List eight factors that an auditor should take into consideration when determining the size
of an audit sample.
b) Citing two examples in each case, describe...(Solved)
a. List eight factors that an auditor should take into consideration when determining the size
of an audit sample.
b) Citing two examples in each case, describe the quality of the following types of audit
evidence:
(i) Evidence originated by the auditor.
(ii) Evidence created by third parties.
(iii) Evidence created by the management of the client.
Date posted: May 14, 2019. Answers (1)
- Briefly explain how an auditor could gather sufficient audit evidence using the following
techniques:
(i) Vouching.
(ii) Verification(Solved)
Briefly explain how an auditor could gather sufficient audit evidence using the following
techniques:
(i) Vouching.
(ii) Verification
Date posted: May 14, 2019. Answers (1)