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Explain the steps an auditor should take if he concludes that the client has made a departure from an accounting standard in the preparation of the financial statements

a) The computerization of business operations has posed many challenges to the auditor.

Explain the difficulties experienced by an auditor in each of the following situations:

i) In the use of test packs. (4 marks)
ii) In on-line systems. (4 marks)
iii) When auditing the output of a complex computerized system. (6 marks)

b) Briefly explain how an auditor verifies the following items in a computerized system.

i) Standing data in a master file (3 marks)
ii) Alterations made in the computer programs. (3 marks)
(Total: 20 marks)

 

 

 

 

 

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