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AA – L2 – SA – Q5.7 – Tests of Controls

Identifying non-test of control.

Question

Which of the following is NOT a test of control?

A Checking for sequential numbering of sales invoices

B Ensuring the segregation of duties between sales ledger staff and the cashier

C Checking for evidence of authorization for credit notes

D Test checking from dispatch notes to sales invoices

Answer

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Tags: Audit Software, Automated Audit Techniques, Data Analytics, ICAG
Level: Level 2

Topic: Audit and Assurance Evidence

AA – L2 – Q39 – Audit Evidence

Describe how audit software can assist in testing Pemberton Products' inventory system. List concerns about Pemberton Products' proposal for continuous inventory checking.

Question

Pemberton Products manufactures plastic products and has an extensive product range which is revised frequently. Your firm has audited Pemberton Products for many years.

The company maintains computerised inventory records and carries out quarterly inventory counts. The inventory records are adjusted for any discrepancies between the records and the physical count.

The managing director is concerned that the quarterly inventory counts are disruptive and time-consuming. He has proposed the introduction of continuous checking throughout the year with no full year-end inventory count.

Required
(a) Describe how you might use audit software to assist you in your testing of the current inventory system.

(b) List the concerns you, as auditor, would have when deciding whether you support the managing director’s proposal.

Answer

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Tags: Audit Evidence, Audit Software, Continuous Inventory Checking, Inventory Systems
Level: Level 2

Topic: Audit Evidence

Tag (SQ): Audit Software

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AA – L2 – SA – Q5.7 – Tests of Controls

Identifying non-test of control.

AA – L2 – Q39 – Audit Evidence

Describe how audit software can assist in testing Pemberton Products' inventory system. List concerns about Pemberton Products' proposal for continuous inventory checking.

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AA – L2 – SA – Q5.7 – Tests of Controls

Identifying non-test of control.

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AA – L2 – Q39 – Audit Evidence

Describe how audit software can assist in testing Pemberton Products' inventory system. List concerns about Pemberton Products' proposal for continuous inventory checking.

You're reporting an error for "AA – L2 – Q39 – Audit Evidence"

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