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Objectives:
Objectives
https://www.huntercampbell.co.nz/changing-role-financial-
controller/
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www.businessdictionary.com/definition/advisory-services.html
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SOX : Sec 302 and 404 SOX : Sec 302 and 404
4. the signing officers-- 4. the signing officers--
A. are responsible for establishing and maintaining internal controls; A. are responsible for establishing and maintaining internal controls;
B. have designed such internal controls to ensure that material information relating B. have designed such internal controls to ensure that material information relating
to the issuer and its consolidated subsidiaries is made known to such officers by others to the issuer and its consolidated subsidiaries is made known to such officers by others
within those entities, particularly during the period in which the periodic reports are within those entities, particularly during the period in which the periodic reports are
being prepared; being prepared;
C. have evaluated the effectiveness of the issuer's internal controls as of a date C. have evaluated the effectiveness of the issuer's internal controls as of a date
within 90 days prior to the report; and within 90 days prior to the report; and
D. have presented in the report their conclusions about the effectiveness of their D. have presented in the report their conclusions about the effectiveness of their
internal controls based on their evaluation as of that date; internal controls based on their evaluation as of that date;
5. the signing officers have disclosed to the issuer's auditors and the audit committee 5. the signing officers have disclosed to the issuer's auditors and the audit committee
of the board of directors (or persons fulfilling the equivalent function)-- of the board of directors (or persons fulfilling the equivalent function)--
A. all significant deficiencies in the design or operation of internal controls which A. all significant deficiencies in the design or operation of internal controls which
could adversely affect the issuer's ability to record, process, summarize, and report could adversely affect the issuer's ability to record, process, summarize, and report
financial data and have identified for the issuer's auditors any material weaknesses in financial data and have identified for the issuer's auditors any material weaknesses in
internal controls; and internal controls; and
B. any fraud, whether or not material, that involves management or other B. any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal controls; and employees who have a significant role in the issuer's internal controls; and
6. the signing officers have indicated in the report whether or not there were 6. the signing officers have indicated in the report whether or not there were
significant changes in internal controls or in other factors that could significantly affect significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation, including any corrective internal controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses. actions with regard to significant deficiencies and material weaknesses.
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Q1
Which statement is incorrect when auditing in a CIS environment? It relates to materiality of the financial statement
A CIS environment exists when a computer of any type or size is
involved in the processing by the entity of financial information assertions affected by the computer processing.
of significance to the audit, whether that computer is operated
by the entity or by a third party. Threshold
The auditor should consider how a CIS environment affects the Relevance
audit.
The use of a computer changes the processing, storage and Complexity
communication of financial information and may affect the
accounting and internal control systems employed by the entity. Significance
A CIS environment changes the overall objective and scope of an
audit.
Risk of fraud or error in on-line computer systems may be increased for the The following matters are of particular importance to the
following reasons, except
If workstations are located throughout the entity, the opportunity for auditor in an on-line computer system, except
unauthorized use of a workstation and the entry of unauthorized
transactions may increase. Authorization, completeness and accuracy of on-line
Workstations may provide the opportunity for unauthorized uses such as transactions.
modification of previously entered transactions or balances.
If on-line processing is interrupted for any reason, for example, due to Integrity of records and processing, due to on-line
faulty telecommunications, there may be a greater chance that access to the system by many users and programmers.
transactions or files may be lost and that the recovery may not be
accurate and complete. Changes in the performance of audit procedures
If transactions are processed immediately on-line, there is less risk that
they will be processed in the wrong accounting period. including the use of CAAT's.
Cost-benefit ratio of installing on-line computer system.
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The applications of auditing procedures using the Which statement is incorrect regarding the evaluation of
general CIS controls and CIS application controls?
computer as an audit tool refer to The general CIS controls may have a pervasive effect on
Integrated test facility the processing of transactions in application systems.
Auditing through the computer If general CIS controls are not effective, there may be a
risk that misstatements might occur and go undetected
Data-based management system in the application systems.
Computer assisted audit techniques Manual procedures exercised by users may provide
effective control at the application level.
Weaknesses in general CIS controls cannot preclude
testing certain CIS application controls.
Which one of the following represents a lack of internal An employee in the receiving department keyed in a
control in a computer-based information system? shipment from a remote terminal and inadvertently
The design and implementation is performed in omitted the purchase order number. The best
accordance with managements specific authorization.
systems control to detect this error would be
Any and all changes in application programs have the
authorization and approval of management. Batch total
Provisions exist to protect data files from unauthorized Sequence check
access, modification, or destruction.
Completeness test
Both computer operators and programmers have
unlimited access to the programs and data files. Reasonableness test
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The most critical aspect regarding separation of An auditor anticipates assessing control risk at a low
duties within information systems is between level in a computerized environment. Under these
Project leaders and programmers circumstances, on which of the following procedures
Programmers and systems analysts would the auditor initially focus?
Programmers and computer operators Programmed control procedures
Data control and file librarians Output control procedures
Application control procedures
General control procedures
Internal control is ineffective when computer From an audit viewpoint, which of the following
department personnel represents a potential disadvantage associated with
the widespread use of microcomputers?
Participate in computer software acquisition
decisions. Their portability.
Their ease of access by novice users.
Design documentation for computerized systems.
Their easily developed programs using
Originate changes in master file. spreadsheets which do not have to be
Provide physical security for program files. documented.
All of the above
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To ensure that goods received are the same as those The completeness of computer-generated sales
shown on the purchase invoice, a computerized figures can be tested by comparing the number of
system should: items listed on the daily sales report with the number
Match selected fields of the purchase invoice to of items billed on the actual invoices. This process
goods received uses
Maintain control totals of inventory value Check digits
Calculate batch totals for each input Control totals
Use check digits in account numbers Validity tests
Process tracing data