Answered: 9 Explain how the effectiveness of…

9 Explain how the effectiveness of general control affects the auditor's test of automated application controls, including auditor's ability to rely on tests done in prior audit.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.

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4. How to identify and monitor the IT control in the course of an audit engagements?
What is the difference between document examination and reperformance when conducting tests of controls?
Obtaining an understanding of the internal control structure is required for first time audit client, but not necessary for recurring clients. TRUE OR FALSE? WHY?
Explain and Analyze whether or not the auditor is able to rely on previous audits' assessments of automated application controls, given the effectiveness of general controls.
An auditor is likely to use procedures to support the operating effectiveness of internal controls. Which of the following would generally not be used ? Select one : O a. Re -perform client procedures O b. Examine documents , records, and reports O c. Make inquiries of appropriate client personnel O d. Analytical procedures
What are the primary reasons for conducting an evaluation of an audit client’s internal control?
6
The difference between assessing control risk for IT control activities versus assessing control risk for manual control activities is best described as follows: Multiple Choice О in a manual environment it is important for the auditor to gain an understanding of the internal control activity before assessing control risk. О in an IT environment, it is not important to gain an understanding of the internal control activity before assessing control risk. О In an IT environment, it is likely that control risk will be assessed as low on largely all audit engagements. О the assessment process that needs to be undertaken for IT controls is essentially the same as would be taken for manual controls.