Luca and Co. are the auditors of Softdream Limited, which owns a frozen food warehouse and a chain of three retail outlets in the town of Glory. The warehouse supplies a wide range of frozen foods to the shops, who do not obtain supplies from anywhere else. Luca and Co. have been the auditors for several years, and carry out an interim (systems) audit shortly before the yearend (which is 31 March) and a final audit in about June each year.

Softdream has had a computerized accounting system maintained by the accountant and run on a PC; wordprocessing is computerized but all other applications have been manually produced. However, the company has computerized all its operations as from 1 April. The company has installed a network system using point-of-sale technology at the retail shops. This system not only produces the customer till receipts but also updates the shops’
stock systems. Customers can pay by cash, cheque, debit card or credit card. There are no account customers.
The network has been installed so that there are terminals in the office block sited next to the warehouse, in the goods inwards and loading bay of the warehouse, and in each of the shop manager’s offices, as well as at the point of sale. The file server is located in the accountant’s office in the office block. The software available on the network includes a standard accounting package (integrated purchase ledger, cash book, nominal ledger), a stock updating program, a wordprocessing program, an email system, a customer database, as well as electronic point of sale software.................

QUESTIONS FOR DISCUSSION
1. Prepare the audit planning memorandum in respect of the audit of the network, outlining the areas of special concern and indicating the audit considerations.
2. What additional information will now be contained in the permanent file?
3. How can computer-assisted audit techniques help in the audit of Softdream Limited?