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Chapter 17
Case Study
What approach could be taken by the auditors?
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How will this affect conventional audit approaches?
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Examination question
Furnistores
(a) audit procedures using audit software
Procedure Reason for procedure
Cast the receivables ledger to ensure it
agrees with the
total on the receivables control account
To ensure the completeness and
accuracy of recording of
items in the receivables ledger and
control account.
Calculate receivables days for each
month end to monitor
control of receivables over the year.
To obtaining new/relevant statistical
information.
.
(b) Problems of using audit software
Cost
There may be substantial setup costs to use the software, especially where the
computer systems of the client have not been fully documented, as is the
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Lack of software documentation
The computer audit department at Furnistores cannot confirm that all system
Change to clients’ systems
Changes to clients’ computer systems can result in costly amendments to the
Outputs obtained
The audit manager needs to be clear exactly what audit assertions are to be
Use of copy files
The use of copy files means that the auditor will not be certain that these are the
(c) Auditing around the computer
This term means that the ‘internal’ software of the computer is not documented or
audited by the auditor, but that the inputs to the computer are agreed to the
expected outputs from the computer.
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