Exam 10: Testing and Evaluation of Systems

When Fidelio plc receives a payables invoice it is: checked by the accounts clerk for accuracy, matched against the purchase order, and the goods received note, then authorized by the line manager who signs it to verify that it has been authorized. How can the auditor test this process?

Wilton Ltd operates a Wages Control Account which they claim is reconciled each month. How can the auditor test this control?

Which of the following is NOT an audit software technique?

Modern software makes the use of CAATs cheap and easy to do so audit staff don't need any special training.

Which of the following sets of duties would ordinarily be considered basically incompatible in terms of good internal control? ?

A trainee auditor has listed what she thought were some of the control objectives in the purchases cycle within an entity at the stage of placing a purchase order as: 1) To ensure that the item purchased is not already in stock. 2) To ensure that the stock count is accurate. 3) To ensure that the order is actually required. 4) To ensure that all orders are paid for. Is she correct? Which of these are control objectives?

Auditors use test data to test controls within the client's computer system.

The use of CAAT's enables auditors to examine large populations of data.

Embedded software can provide continuous monitoring of client data.

Which of the following sets of duties would ordinarily be considered basically incompatible in terms of good internal control? Being able to: i. Authorize a new supplier and authorising the payment invoices from suppliers ii. Enter details of new employee on the master file database and prepare the payroll iii. Record cash receipts in the Cash Book and bank the monies iv. Maintain the Receivables ledger and authorise credit limits for customers