Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

tormy and Daniel are working on the audit of McBride LLC, an international retailer of farm equipment and other heavy machinery. tormy and Daniel have

image text in transcribed tormy and Daniel are working on the audit of McBride LLC, an international retailer of farm equipment and other heavy machinery. tormy and Daniel have been tasked by their supervisor to audit the client's revenue accounts and look for any evidence of hisstatements. The pair has decided to use a proprietary audit software program to enter fictitious data into the client's system and heck for errors etc. Which of the following represents a way that Stormy and Daniel could verify the effectiveness of controls relatec the revenue process? Stormy and Daniel could consider obtaining a sample of exception reports generated by the clients' system in response to the fictitious data entered into the system by the audit software and look for evidence of the exceptions being cleared in a timely and appropriate manner. Stormy and Daniel should consider requesting written assurances by both senior management and the internal audit function pertaining to no misstatements being present in the revenue-receivables cycle. Once obtained, these representations should be added to the current year's audit file. Stormy and Daniel should consider examining similarly sized firms in other industries in order to check for anomalous ratios and other financial metrics which might warrant further investigation by the audit team. Stormy and Daniel could consider employing extra IT entity-level controls in order to provide an audit opinion on entitylevel controls related to the revenue-receivables cycle

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Training And Development Audit

Authors: Rosemary Harrison

2nd Edition

0955970725, 978-0955970726

More Books

Students also viewed these Accounting questions

Question

Prepare and properly label figures and tables for written reports.

Answered: 1 week ago