Kyle Sanders was auditing the financial statements of World Wholesale Industries when she was presented with a

Question:

Kyle Sanders was auditing the financial statements of World Wholesale Industries when she was presented with a curious situation. A member of World’s top management team approached her with an anonymous note that had been retrieved from the company’s suggestion box. The note accused unnamed employees in World’s IT department of altering the accounts payable database by entering bogus transactions involving fictitious vendors. Payments made to this fictitious vendor were being intercepted and cashed by the fraudster.

Required:

a. What tests of controls would be effective in helping Sanders determine whether World’s vendor database was susceptible to fraud?

b. What computer‐assisted audit technique would be effective in helping Sanders determine whether World’s vendor database had actually been falsified?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...