DATA ANALY ACCT + CONNECT LL
1st Edition
ISBN: 9781266167867
Author: RICHARDSON
Publisher: MCG/CREATE
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Chapter 6, Problem 4DQ
To determine
Explain how perspective analytics might help address a potential audit issue.
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An internal auditor is examining the effectiveness of procedures management established to protect customer data from cyberattacks and whether those procedures are cost effective. This is an example of an operational audit.
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What information may auditors use to make a decision on whether or not to accept a new customer?
What should be the major emphasis in auditing the retainedearnings account? Explain your answer.
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- What sources of information can auditors use in connection with deciding whether to accept a new client?arrow_forwardMust all observations identified by an internal audit team during an assurance engagement be acted upon by management? Explain. What are the implications for the internal audit function if management fails to respond appropriately to an observation warranting corrective action?arrow_forwardThe internal audit can pinpoint the person responsible for carelessness. This will help to: Determine Liability Asset Protection Performance Appraisal Provide Suggestions Which one of the following is not true about internal auditors? üzul lis TOSHIBAarrow_forward
- In performing a risk-based audit, when developing audit recommendations, the IT auditor should: a) Use Computer Assisted Audit Techniques (CAATs) to test transactions. b) Analyze the inherent risk, residual risk, and the cost of additional controls in relation to the potential for loss. c) Determine if the risk is material based solely on auditor judgement. d) Perform substantive procedures to eliminate control riskarrow_forwardAre internal controls required even if an auditor doesn't plan to rely on them in his audit? Explain.arrow_forwardAn 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 proceduresarrow_forward
- Describe a situation that would require an auditor to give an unmodified opinion without a standard report. Describe a situation that would cause an auditor to modify their opinion. Analyze possible actions an auditor might take if a client’s financial statements depart from GAAP. Do you think the demand for assurance services will increase or decrease in the future? Explain.arrow_forwardFor an audit, what should be considered when understanding a client and analyzing the risks?arrow_forwardIn which of the following circumstances would an auditor expect to find that an entity had implemented automated controls to reduce risks of misstatement?a. When errors are difficult to predict.b. When misstatements are difficult to define.c. When large, unusual, or nonrecurring transactions require judgment.d. When transactions are high volume and recurring.arrow_forward
- Which of the following is NOT a general control?* a. Backup of live data b. Use of passwords c. Setting an acceptable range for working hours d. Calamity-proof IT facilities ABOUT AUDITING/ACCOUNTING TOPICSarrow_forwardWhat type of audit report does a client typically want or hope for?arrow_forwardased on an assessment of audit risk, the auditors are concerned with the following two risks: The risk that that the client might be making duplicate payments to vendors. The risk that the client’s accounting clerk might be making unauthorized payments to himself. Required: a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments.arrow_forward
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