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Chapter 11 and 13 Textbook Problems RaceAnn Abbott ACC491

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Briefly describe three strategies for testing internal controls when information technology is used for significant accounting processing.;Evaluating Control risks established under the users controls also known as auditing around the computer (Boynton and Johnson, 2006). This is when an auditor tests the controls directly.;Low risk of evaluation of internal controls based on application of controls (Boynton and Johnson, 2006). This is done by three steps, evaluating the computer application controls, general controls, and manual follow through of exclusions in application controls.;High Control risk evaluated based on general controls and manual follow up on procedures (Boynton and Johnson, 2006).;Identify two strategies that might be used to support a low control risk assessment. Discuss the difference between the two strategies.;A low risk assessment would be based on the evidence of controls from within an entity tested by the auditor and shown to be effective. The auditor can assess a low control risk based on the effectiveness of computer application controls (Boynton and Johnson, 2006). I believe one is a test of human controlled aspects and the other is how the system handles errors or erroneous inputs of information, and how they are corrected.;Discuss a third audit strategy that might be used to assess control risk at a high level. Explain why this strategy will not support a low control risk assessment.;An auditor can assess the control risk of an entity based on computer application controls and as

 

Paper#20728 | Written in 18-Jul-2015

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