Assume that when conducting procedures to obtain an understanding of the control structure in the Denton Seed Company, you checked “No” to the following internal control questionnaire items:
• Does access to online files require specific passwords to be entered to identify and validate the terminal user?
• Are control totals established by the user prior to submitting data for processing? (Order entry application subsystem)
• Are input control totals reconciled to output control totals? (Order entry application subsystem)

Required:
a. Describe the misstatements due to error or fraud that could occur because of the weaknesses indicated by the lack of controls.
b. Explain the impact these control weaknesses would have on the audit approach selected and on the design of the audit programs.