Exam 9: Systems Work Basic Ideas 2

An entity that carries on business over the internet raises some very specific issues that an Auditor needs to be aware of. Which of the following ISA Standards is particularly relevant in the context of selling over the internet?

Which of the following is NOT an advantage of an auditor using an audit trail flow chart?

Why would the auditor be interested to know that users of the information produced by computerized systems review the output for obvious errors?

Why have boundary controls become more important to companies in recent years?

What is the purpose of an internal control questionnaire?

An online business makes and then sells high-value, unique pieces of jewellery designed around Australian opals. Each opal has individual colour and pattern properties that make the pieces highly desirable. The website allows customers to place a selected piece of jewellery into a virtual shopping cart. Because of the high-value low-volume nature of the business, and as a unique selling point, at this point the item is removed from inventory and held for the customer. The customer has 72 hours to decide if they wish to proceed with the transaction. If the customer wishes to proceed, they must provide their payment details. Once funds are confirmed as transferred (this can take up to 48 hours) the item is shipped to the customer. Again because of the unique nature of each item, and as part of their commitment to customer service, the customer has a two-week, no questions asked, return window. A significant number of items is returned under this policy. Which of the following is going to be the most significant risk the auditor is going to want to consider??