Your audit client is Techgiant, a listed company that invests in the technology sector. Techgiant recently acquired Woofer, a communication platform primarily used by people with pets to share funny photos, videos, and stories about their pets for free. Woofer has established such a strong community that it has also become known as a dating site. Techgiant plans to generate revenue by creating a paid service for enhanced dating functionality within Woofer. Techgiant paid $100m to acquire Woofer (a substantial premium over the existing stock price), which was funded by a ten-year $100m loan. Immediate repayment of the loan is required if Techgiant's assets (excluding Woofer) fall below $150m. Techgiant's assets (excluding Woofer) are currently valued at $200m, comprising investments in around 50 listed technology firms (accounting for $170m) and 10 unlisted technology startups (accounting for $30m). Techgiant likes to hold investments in startups for at least 5 years and typically makes 1-2 unlisted investment transactions per year.

Required

You have assessed Control Risk in relation to the accuracy, valuation and allocation of Techgiant's investments in listed companies as low. From your initial review of the listed investments report, however, you have noticed that the year-end share prices for some of these companies have been input incorrectly.

(a) Provide one (1) example of an IT input control and one (1) example of a manual control that may have prevented this error.

(b) Define 'test data'. Explain how test data could be used to test the IT control you discussed in part (a)

(c) After undertaking additional testing you have determined that this is a systemic error and reassessed Control Risk as high. Discuss how this finding will change your planned nature of audit testing in relation to to the accuracy, valuation and allocation of Techgiant's investments in listed companies.

(d) In relation to the accuracy, valuation and allocation of Techgiant's investments in unlisted companies, you have decided to employ an expert to provide an independent valuation. Provide two factors you would need to consider before placing reliance on the work of this expert.