Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 12, Problem 9RQ
To determine
Identify the impact on the audit when the accounting information is outsourced to third-party data centre.
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Your client has outsourced the majority of the accounting information system to a third-party data center. What impact does that have on your audit of the financial statements?
CPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data.
d. How can the CPAs be satisfied that the computer programs presented to them for testing are actually those used by the client for processing accounting data?
CPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data.
b. Under what conditions do CPAs decide to audit through the computer instead of around the computer?
Chapter 12 Solutions
Auditing And Assurance Services
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Describe how the nature of evidence used to...Ch. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16.1MCQCh. 12 - Prob. 16.2MCQCh. 12 - Prob. 16.3MCQCh. 12 - Prob. 17.1MCQCh. 12 - Prob. 17.2MCQCh. 12 - Prob. 17.3MCQCh. 12 - Prob. 18.1MCQCh. 12 - Prob. 18.2MCQCh. 12 - Prob. 18.3MCQCh. 12 - Prob. 19.1MCQCh. 12 - Prob. 19.2MCQCh. 12 - Prob. 19.3MCQCh. 12 - Prob. 20DQPCh. 12 - Prob. 21DQPCh. 12 - Prob. 22DQPCh. 12 - Prob. 23DQPCh. 12 - Prob. 24DQPCh. 12 - Prob. 25DQPCh. 12 - Prob. 26DQPCh. 12 - Prob. 27DQPCh. 12 - A CPAs client, Boos Baumkirchner, Inc., is a...Ch. 12 - Prob. 29DQPCh. 12 - Prob. 30DQPCh. 12 - Based on a cost-benefit analysis, management at...Ch. 12 - Prob. 32DQPCh. 12 - Prob. 33DQPCh. 12 - Prob. 34DQP
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- CPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data. c. In auditing through the computer, CPAs may use test data. (1) What are test data? (2) Why do CPAs use test data?arrow_forwardHow might an auditor effectively use preliminary analytical procedures in the audit of various expense accounts, such as miscellaneous expenses? How might this enable the auditor to better understand the business and its environment? How do computer-assisted procedures impact this audit?arrow_forwardCPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data. a. Describe the auditing approach referred to as “auditing around the computer."arrow_forward
- Spreadsheet software would be most useful for which of the following audit activities?a. Testing internal controls over computerized accounting applications.b. Preparing an audit plan.c. Preparing a comparison of current-year expenses with those from the previous year.d. Drafting a planning memorandum.arrow_forwardCPAs may audit around or through computers in the examination of financial statements of clients who utilize computer to process accounting data. Required: Describe the auditing approach referred to as auditing around the computer.arrow_forward1. CPAs may audit around or through computers in the examination of financial statements of client who utilize computer to process accounting data. Required: a. Describe the auditing approach referred to as auditing around the computer. b. Under what condition does the CPA decide to audit through the computer instead of around the computer?arrow_forward
- 1.Explain the relation ship between application controls and transaction related audit objectives . 2.explain what is meant by auditing around the computer and describe what must be present for this approach to be effective when auditing clients who use IT to process accounting information 3.explain what meant by the test data approach. What are the major difficulties with using this approach?define parallel simulation with audit software and provide an exmaple of how it can be used to test a client's payroll system 4.describe risks that are associated with purchasing software to be installed on desktop computer hard drives.what precautions can clients take to reduce those risks? 5.compare the risks associated with network systems to those associated with centralized IT functions 6.how does the use of a database management system affect risks? 7.an audit client is in the process of creating an online web-based sales ordering system for customers to purchase products using personal…arrow_forwardCPAs may audit around or through computers in the examination of financial statements of clients who utilize computer to process accounting data. Required: Under what condition does the CPA decide to audit through the computer instead of around the computer?arrow_forwardA CIS environment exists when a computer of any type o. size is involved in the processing of an entity's financial information. If an auditor is involved in the configuration and system development prior to the implementation, is the financial information is considered reliable and free from error?arrow_forward
- Explain all the five steps involved in the information system based audits in your own words. How would an auditor verify the source documents while auditing accounting information systems where business is conducted fully online?arrow_forwardHow would you distinguish forensic accounting, fraud auditing, and investigative auditing from financial auditing?arrow_forwardTo complete an audit of accounting information system effectively, auditor will need to have some knowledge of computers and their accounting applications, but not necessarily every auditor needs to be a computer expert. Explain to which extent auditors of accounting information systems should possess computer expertise to be effective auditors.arrow_forward
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