(a): Five Factors Influencing the Choice of Testing Method

1. Complexity of the Client’s System:
   • Highly complex systems may require CAATs to effectively analyze and test automated processes.
2. Volume of Transactions:
   • A large volume of transactions often necessitates the use of CAATs to handle data efficiently.
3. Availability of Audit Trail:
   • In systems where the audit trail is embedded or limited, CAATs may be essential for extracting and analyzing data.
4. Cost and Resources:
   • The cost of implementing CAATs and the availability of skilled personnel may influence the decision.
5. Nature of Tests:
   • For certain tests, such as recalculations or large data comparisons, CAATs are more suitable. Manual methods may suffice for simple, judgment-based testing.

Part (b): Five Solutions to Loss of Audit Trail

1. Implementing Automated Backup Systems:
   • Ensures data and records are continuously backed up for future reference.
2. Using Audit Logs:
   • Enable audit logs within systems to capture and preserve all user and system activity.
3. Digital Recordkeeping:
   • Adopt systems that maintain digital copies of all transactions to minimize reliance on physical trails.
4. Regular System Checks:
   • Conduct periodic reviews and verifications to ensure data integrity and the existence of a reliable audit trail.
5. Data Encryption and Security:
   • Secure data storage using encryption to prevent accidental or intentional loss of records.