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a)Distinguishing features of computer based system
• Loss of audit trail i.e. the inability to trace the transactions executed throtigh the system.
• Data needed for the audit purpose may be overwritten.
• Security to the systems when there is inadequate controls.
• Availability of the computer time.
• Use of CAATs to evaluate the adequacy of the client's computer based system.
• Program controls may be important to ensure the completeness and accuracy of the
accounting records. -
• Centralization of controls in the- computer based systems department.
• Lack of primary records e.g. online system may lack the originating document.
• Use of encoded data- this can read the transposition or encryption errors arising at the
encoding stage.
• The need for specialist expertise where the auditor's knowledge is limited.
b)
i) Define test data
These are designed to test the performance of the clients' programs. What it involves is for the
auditor either using dummy data i.e. data he has created himself or live data i.e. the client's data
that was due for processing to manually work out the expected output using the logic and steps
of the program. This data is then run on the computer using the program and the results are
compared. A satisfactory outcome gives the auditor a degree of assurance that if that programme
is used continuously throughout the year, then it will perform as required.
ii) Ways of using test data in audit
• Use of live data
Involves the auditor using the real data that has been processed. He will determine the
results he would.expect from the processing of the data. He checks if the actual
processing of the data has been carried out in the expected.way and investigates any
differences.
• Dummy data or dead data in normal production run.
The auditor conducts a series of dummy transactions which contain the required
conditions.
These are processed along with the normal data.
The actual results are then compared with predetermined results.
• Dummy data in a special run
The auditor creates a special data and uses it against copies of the client's data files. The
auditor should obtain the assurance that the program-being used in the test run is identical
to that used by the client for the production runs and not the special program kept aside
for the auditors use
Kavungya answered the question on May 15, 2019 at 08:43
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Required:
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Date posted: May 15, 2019. Answers (1)
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Required:
Explain three manual techniques that an auditor could use in the audit of a computer based
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performed at each stage of processing.
The transformation from manual accounting systems to fully computer based information
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Required:
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Date posted: May 15, 2019. Answers (1)
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Date posted: May 15, 2019. Answers (1)
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Required;
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