Explain how client internal controls can be improved through the proper installation of IT.Identify risks for accounting systems that rely heavily on IT functions.Define what is meant by an audit trail and explain how it can be affected by the client’s integration of IT.Distinguish between random error resulting from manual processing and systematic error resulting from IT processing and give an example of each category of error.Identify the traditionally segregated duties in noncomplex IT systems and explain how increases in the complexity of the IT function affect that separation.Distinguish between general controls and application controls and give two examples of each.Identify the typical duties within an IT function and describe how those duties should be segregated among IT personnel.Explain how the effectiveness of general controls affects the auditor’s tests of automated application controls, including the auditor’s ability to rely on tests done in prior audits

Internal controls are defined as the procedures, mechanisms and rules executed through company in…

Answered: Explain how client internal controls…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 28CYBK

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Explain how client internal controls can be improved through the proper installation of IT.
Identify risks for accounting systems that rely heavily on IT functions.
Define what is meant by an audit trail and explain how it can be affected by the client’s integration of IT.
Distinguish between random error resulting from manual processing and systematic error resulting from IT processing and give an example of each category of error.
Identify the traditionally segregated duties in noncomplex IT systems and explain how increases in the complexity of the IT function affect that separation.
Distinguish between general controls and application controls and give two examples of each.
Identify the typical duties within an IT function and describe how those duties should be segregated among IT personnel.
Explain how the effectiveness of general controls affects the auditor’s tests of automated application controls, including the auditor’s ability to rely on tests done in prior audits

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