A client has a computerized credit approval process that incorporates various factors, such as:
• Previous credit history with the company
• Current credit rating obtained online from Dun & Bradstreet
• Current account balance
• Size of proposed credit balance
• Last credit review rating by the credit manager based on current correspondence with the customer and an analysis of the latest annual report
The Company also has a policy that the credit for an individual company, or a group of companies that are separate legal entities but are part of the same holding company, cannot exceed $1 million.
The auditor is considering three alternatives to determine whether the credit approval function is operating correctly:
• Generalized audit software (GAS)
• Snapshot, or tagging and tracing
• Manually selecting transactions and tracing through to determine that only those companies that should have been authorized credit were granted credit

Required
a. Explain how each of these approaches might be used to test the operating effectiveness of the current credit granting process.
b. Evaluate the strengths and weaknesses of each approach, and recommend the approach that you believe would be both (1) most efficient in achieving the audit objective and (2) most effective. State the rationale for your answer.