Accounting Information Systems
Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Chapter 16, Problem 4P
To determine

Explain potential risks to Company POEC and determine the course of action taken by the external auditor.

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Risk Identification and Plan of Action Baker Manufacturing uses EAMs in several of its financial systems to capture material transactions. During this year's annual financial audit, the external auditors noticed unusually large gaps in dates of the captured transactions being copied to the audit files. Baker Manufacturing management informed the auditors that the increased transaction processing times caused by the EAMs had forced computer operators to turn off the EAMs to allow the processing of important transactions in a timely fashion. In addition, much maintenance had been performed on key applications during the past year. Required: Outline any potential risks and determine the courses of action the external auditors should follow.
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