You are a manger at a local CPA firm and you are reviewing workpapers prepared by your staff during the audit of a clients computer controls. You find that the staff used test data to test the clients computer program that maintains the accounting records. Your staff obtained a duplicate copy of the program and the accounting data file from the manager of the clients computer operations. The staff borrowed test data from the client, which had been prepared by the clients programmers when the program was originally written and tested. The staff loaded the program on the CPA home office computer and processed the test data. A copy of the processing summary report showed that no errors were made. The staff concluded that application controls were strong.

You believe that the audit tests were flawed. Identify the problems with the procedures used by your staff and recommend revised tests that could avoid the flaws made by the staff.