Because of the use of personal computers by many businesses, audit teams must know about the potential internal control weaknesses inherent in such an environment. This knowledge is crucial if audit teams are to make a proper assessment of the related control risk and to plan an effective and efficient audit approach.
In the following case study, assume that you are participating in the audit of Chicago Appliance Company and that the background information was obtained during the planning phase of the engagement. You have been asked to
(a) Consider the potential internal control weak-nesses that exist in this end- user application and
(b) Assess how those internal control weak-nesses could alter the audit plan for the current year.