Question:You are a trainee auditor and your team leader, Will, provides you with practical personal development challenges. Will has emailed you the following internal controls that were tested in prior audits.

1. The accounting software automatically reconciles totals in each of the subsidiary master files for accounts receivable, accounts payable, and inventory accounts to the respective general ledger accounts. This control was most recently tested in the prior year. No changes to the software have been made since testing, and there are strong

controls over IT security and program changes.

2. The accounts payable clerk matches vendor invoices with related purchase orders and receiving reports, and investigates any discrepancies noted. This control was tested in

the prior year's audit. No changes in this control or personnel involved have occurred since testing was last performed.

3. The sales system automatically determines whether a customer's purchase order and related accounts receivable balance are within the customer's credit limit. The risk of

shipping goods to customers who exceed their credit limit is deemed to be significant. The control was last tested during the audit two years ago.

4. The perpetual inventory system automatically extends the unit price times quantity for inventory on hand. This control was last tested two years ago. During the current

year, the client made changes to the system.

5. The client's purchasing system was acquired from a reputable software supplier several years ago. This system contains numerous automated controls. The auditor tested those controls last year. No changes have been made to any of these controls since last tested and the client's controls over IT security and program changes are excellent.

Evaluate each internal control independently, then send a return email to Will that:

1. states whether the control must be tested or not in the current year's audit.

2. justifies your decision about whether testing is or is not required for each of the

controls.

Control number:

Testing required/not required:

Justification: