Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 8, Problem 34P
a.
To determine
Explain the auditing approach of auditing “around” the computer.
b.
To determine
Explain the conditions behind using the audit through the computer instead of around the computer.
c.
To determine
Explain test data and the use of test data.
d.
To determine
Explain the condition when the CPAs would be satisfied that the computer programs presented to them for testing are actually those used by the client for processing accounting data.
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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?
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?
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?
Chapter 8 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 8 - List and describe the major components of an...Ch. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Distinguish general control activities from...Ch. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - What is the difference between an Internet-based...Ch. 8 - Prob. 15RQCh. 8 - Prob. 16RQCh. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22QRACh. 8 - Prob. 23QRACh. 8 - Prob. 24QRACh. 8 - Prob. 25QRACh. 8 - Prob. 26QRACh. 8 - Prob. 27QRACh. 8 - Prob. 28QRACh. 8 - Prob. 29AOQCh. 8 - Prob. 29BOQCh. 8 - Prob. 29COQCh. 8 - Prob. 29DOQCh. 8 - When an online real-time (OLRT) IT processing...Ch. 8 - Prob. 29FOQCh. 8 - Prob. 29GOQCh. 8 - Prob. 29HOQCh. 8 - Prob. 29IOQCh. 8 - Prob. 29JOQCh. 8 - Prob. 29KOQCh. 8 - Prob. 29LOQCh. 8 - Prob. 30OQCh. 8 - Prob. 31OQCh. 8 - For each definition (or partial definition) in the...Ch. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38ITC
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Similar questions
- 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?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_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
- CPAs 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_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_forwardBased 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. c. Describe the advantages of using data analytics software to identify unusual transactions or entries.arrow_forward
- ased 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_forwardHow would you distinguish forensic accounting, fraud auditing, and investigative auditing from financial auditing?arrow_forwardAn 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. Question options: True Falsearrow_forward
- The audit documentation are the connecting link between the client's accounting records, financial statements, and the auditor's report. TRUE OR FALSE? WHY?arrow_forward1. Computer Assisted Audit Techniques (CAATs) are important tools than an IS auditor uses to gather and analyze data during an IS audit. One type of tool is the Generalized Audit Software (GAS). In your own words, how does CAATs affect the work of an IS auditor? What are the benefits of using CAATs in conducting an Audit? 2. Every organization has controls in place. Such controls must be effective. They are effective if they prevent, detect, or contain incidents and enable recovery from events that cause risks. Enumerate those three types of control and explain how these controls effectively address those events that cause risksarrow_forwardWhich of the following can be used as a fundamental source of information in an audit? a. Money in the safe b. Oral testimony of the person responsible for accounting c. An e-mail from a supplier d. None e. Income statementarrow_forward
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