Two auditors for the CPA firm of Alford \& Alford were engaged in a discussion about the best way to test the computer controls of their client, Mod-Comp., Inc. Jane Tester contended that the traditional test data method would be best because the client's computer system still used batch processing in some of its applications. Jim Progemer stated that they should develop their own computer program so that they would have more flexibility in testing the client's computer controls.

Required:
[If you wish to test only the general knowledge in the chapter, cover only requirement (a); requirement (b) is more specific.]

a. Discuss the advantages and disadvantages of the two techniques advocated by each of the auditors. (Note: Try to develop some answers in addition to those you obtain from reading the appropriate sections of the chapter.)

b. Show how each of these techniques would operate by developing your own data, such as the following:
(1) Develop five items of test data, the predetermined output, and the form of the computer output for the test data approach.
(2) Develop five items of client's actual data and develop a description of the auditors' computer program that would test these data. Show the form of the computer results and the client's output and indicate why they do or do not match.