You are a staff information systems auditor in a public accounting firm. The firm has just acquired a new client-a small manufacturing organization. The client uses a minicomputer for its data processing.

All application systems are straightforward batch systems with well-defined input and output. The client uses a database management system, however, that was purchased initially for its bill-of-materials application system, but all application systems now use the database management system to maintain their associated files. There is only limited sharing of data among applications.

Required. You are undertaking the first audit of the new client. The partner in charge asks you to advise him on whether to plan the audit through the computer or around the computer. He is concerned that the client's use of the database management system could have increased the likelihood of errors and irregularities occurring. Write a short report giving your recommendations and the reasons behind them. In particular, discuss your expectations about the inherent risk and control risk associated with the application systems, and outline how your expectations about the inherent risk and control risk could affect the approach you will recommend to the conduct of the audit.