Use the following information to prepare an IT Planning Memo. You are the IT audit senior. Your
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Use the following information to prepare an IT Planning Memo.
- You are the IT audit senior. Your audit firm has several branches, but you are working this particular client from the Melbourne, FL office.
- The IT audit will support the financial statement audit of Company XYZ, with a fiscal year ending on December 31, 2020.
- Discussions with the financial audit Director regarding IT audit involvement have already taken place and are documented in work paper (w/p) 1000.1. IT auditors have not been involved in previous audits for this client.
- Your team is composed of IT Partner P, IT Manager M, and IT Audit Staff AS. You are the IT audit Senior S.
- The audit timing includes: Planning will be performed during the sixth month of the year under audit; Interim audit procedures will take place during two months before the end of the fiscal year; Year-end procedures are scheduled for January through March of the year following the end of the fiscal year; and all work papers and audit documentation will be due by and signed off on April 30th of the year following the end of the fiscal year.
- The IT audit is estimated to take 100 hours. Hours will be charged to client code: Company XYZ-0000.
- An understanding of Company XYZ's IT environment is documented in w/p 1540.
- The three relevant applications for the IT audit are:
- All Accounting Application (AAA) - used to capture and processing accounting-related transactions. AAA is installed on a UNIX platform (or operating system) and uses Oracle database. AAA can be accessed via a Windows network.
- Financial Document Generator Application (FDGA) - used to produce all types of financial reports and documentation. FDGA is installed on a Windows operating system, and uses Oracle as its database. FDGA is accessed via a Windows network.
- Human Resources and Payroll Application (HRPA) - used to manage the company's human resources and process payroll. This application is hosted outside of the company, at a third-party organization called HRP-For-All.
- The relevant application controls used to mitigate risks in this audit are listed in Exhibit 3.5b on pages 8 through 13(these must be added to the IT Planning Memo). Use w/p 1000.2 for reference purposes.
- Deviations or findings resulting from testing the relevant application controls will be documented in w/p 2302.
- There will be no work of others (e.g., Internal Audit personnel, etc.) used in the IT audit.
- Human resources and payroll services are performed by a third-party service organization called HRP-For-All, located in Austin, Texas. Deloitte, the service auditor, just finished issuing a report assessing the controls at the service organization for the period July 1, 20XX through June 30, 20XX. Controls at HRP-For-All were found to be effective.
- There are no other areas identified within Company XYZ that IT auditors can assist with.
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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