Question: If the client changes the accounting information system during the
If the client changes the accounting information system during the year, what impact does this have on the auditor’s tests of ICFR? Do controls have to be tested before and after the change? Why or why not? What impact might this have on the financial statement audit?
Answer to relevant QuestionsWhy does a manual control require more tests of operating effectiveness than an automated control?What components of risk are independent of the audit? Which components may be set by the auditor? What is the basis for setting them? Which components are estimated? Which component may be calculated based on the others?Why is it difficult for the function of application controls to be effective when the design or operation of general controls is not?What steps are followed when performing tests of details of balances and drawing conclusions using a sample?Flex Bandage Inc. manufactures surgical wraps which it distributes to hospitals and clinics around the country. Flex Bandage uses primarily trade accounts when dealing with its customers and bases its accounts receivable ...
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