11.1 You are the director of internal auditing at a university. Recently, you met with Issa Arnita, the manager of administrative data processing, and expressed the desire to establish a more effective interface between the two departments. Issa wants your help with a new computerized accounts payable system currently in development. He recommends that your department assume line responsibility for auditing suppliers invoices prior to payment. He also wants internal auditing to make suggestions during system development, assist in its installation, and approve the completed system after making a final review. Would you accept or reject each of the following? Why? a. The recommendation that your department be responsible for the pre-audit of supplier's invoices. b. The request that you make suggestions during system development. c. The request that you assist in the installation of the system and approve the system after making a final review. 11.2 As an internal auditor for the Quick Manufacturing Company, you are participating in the audit of the companys AIS. You have been reviewing the internal controls of the computer system that processes most of its accounting applications. You have studied the companys extensive systems documentation. You have interviewed the information system manager, operations supervisor, and other employees to complete your standardized computer internal control questionnaire. You report to your supervisor that the company has designed a successful set of comprehensive internal controls into its computer systems. He thanks you for your efforts and asks for a summary report of your findings for inclusion in a final overall report on accounting internal controls. Have you forgotten an important audit step? Explain. List five examples of specific audit procedures that you might recommend before reaching a conclusion. 11.6 You are performing an information system audit to evaluate internal controls in Aardvark Wholesalers (AW) computer system. From an AW manual, you have obtained the following job descriptions for key personnel: Director of information systems: Responsible for defining the mission of the information systems division and for planning, staffing, and managing the IS department. Manager of systems development and programming: Reports to director of information systems. Responsible for managing the systems analysts and programmers who design, program, test, implement, and maintain the data processing systems. Also responsible for establishing and monitoring documentation standards. Manager of operations: Reports to director of information systems. Responsible for management of computer center operations, enforcement of processing standards, and systems programming, including implementation of operating system upgrades. Data entry supervisor: Reports to manager of operations. Responsible for supervision of data entry operations and monitoring data preparation standards. Operations supervisor: Reports to manager of operations. Responsible for supervision of computer operations staff and monitoring processing standards. Data control clerk: Reports to manager of operations. Responsible for logging and distributing computer input and output, monitoring source data control procedures, and custody of programs and data files. a. Prepare an organizational chart for AWs information systems division a. Prepare an organizational chart for AWs information systems division. b. Name two positive and two negative aspects (from an internal control standpoint) of this organizational structure. c. What additional information would you require before making a final judgment on the adequacy of AWs separation of functions in the information systems division? 11.5 Lou Goble, an internal auditor for a large manufacturing enterprise, received an anonymous note from an assembly-line operator who has worked at the companys West Coast factory for the past 15 years. The note indicated that there are some fictitious employees on the payroll as well as some employees who have left the company. He offers no proof or names. What computer-assisted audit technique could Lou use to help him substantiate or refute the employees claim