The internal audit department of Sachem Manufacturing Company is considering buying computer software that will aid in the auditing process. Sachem's financial and manufacturing control systems are completely automated on a large mainframe computer. Melinda Robinson, the director of internal audit, believes that Sachem should acquire computer audit software to assist in the financial and procedure audits that her department conducts. The types of software packages that Robinson is considering are described in the following section.

Required: 

a. Without regard to any specific computer audit software, explain to the internal auditor the general advantages of using computer audit software to assist with audits.

b. Describe the audit purpose facilitated and the procedural steps to be followed by the internal auditor to use a(n)

1. generalized audit software package.

2. integrated test facility package.

3. control flowcharting package.

4. program (parallel) simulation and modeling package.

Transcribed Image Text:

A generalized audit software package that assists in basic audit work, such as the retrieval of live data from large computer files. The department would review this information using conventional audit investigation tech- niques. Specifically, the department could per- form criteria selection, sampling, basic computations for quantitative analysis, record handling, graphical analysis, and the printing of output (confirmations). An integrated test facility package that uses, monitors, and controls dummy test data through existing programs and checks the exis- tence and adequacy of program data entry controls and processing controls. A control flowcharting package that provides a graphical presentation of the data flow of information through a system, pinpointing control strengths and weaknesses. A program (parallel) simulation and modeling package that uses actual data to conduct the same systemized process by using a different computer-logic program developed by the auditor. The package can also be used to seek answers to difficult audit problems (involving many comparisons and computations) within statistically acceptable confidence limits.