Answered: David Savage asked you to write a memo…

David Savage asked you to write a memo presenting the issues and the risks associated with consultants. Further, outline a set of procedures that could be used as a guide in selecting a consultant.

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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Operating system security involves policies, procedures, and controls that determine who can access the operating system. User access privileges are assigned to individuals and to entire workgroups authorized to use the system.The way access privileges are assigned influences system security. Priviliges should be carefully administered and closely monitored for compliance with organizational policy. Choose one of the options below, that is not a test of control of the audit objective relating to access privileges. a. Review employee records to determine whether users have formally acknowledged their responsibility to maintain the confidentiality of company data.b. Review the privileges of a selection of user groups and individuals to determine if their access rights are appropriate for their job descriptions and positions.c. The auditor should verify that individuals are granted access to data and programs based on their need to know.d. Review the account lockout policy and procedures…
Audit concerns and implications on risk assessment are two important factorsthat must be addressed in a computer information system enviroment.Discuss the above statement.
In order to get a knowledge of a client's internal control system, auditors must first identify the problem.
A CPA may receive a commission for recommending a particular computer system to an audit client. True or False
Auditors seek to understand a client's internal control in order to better serve their clients.
Part (b). The system experts perform the design and implementation phases of the system development life cycle. However, the accountant’s role in these phases cannot be ignored. Comment on the statement.
The system experts perform the design and implementation phases of the system development life cycle. However, the accountant’s role in these phases cannot be ignored. Comment on the statement.
(ANSWER IN PARAGRAPH FORM) What are the most significant challenges that auditors face when assessing the effectiveness of Internal Control Information Technology General Controls (ITGC), and how can these challenges be overcome in order to ensure the reliability and integrity of IT systems and processes in a CIS environment?
List three reasons management may ask for an operational audit to be performed, and explain how the audit program would be impacted by each of them.
Discuss some of the agency problems your client might encounter and explain how such agency problems can be resolved.
Which of the following statements best describes the phrase, “evaluating the design of a control”? Group of answer choices A. Considering whether the control, individually or in combination with other controls, is capable of effectively preventing, or detecting and correcting, material misstatements. B. Expressing an opinion as to the effectiveness of a control. C. Observing the application of specific controls. D. Determining whether the control exists and that the entity is using it.
Discuss the auditor's risk assessment procedures for assessing control risk, and provide specific procedures related to understanding management's risk assessment component of internal control.