Two key account balances at risk of material misstatement. For each account balance, the key assertion at risk. A justification as to why the account balances and assertions are at risk. An outline of one (1) substantive test of detail that Tyrone could undertake for each account to address the assertion and risk identified.

In relation to Hales Ltd:

• The weaknesses in the internal controls for each of the three aspects of the inventory system identified (raw materials, finished goods and changes to the master file).
• An assessment of the implications of each of the weaknesses you have identified.
• Three tests of control JDM’s IT audit division could perform to assist Tyrone with verifying the effectiveness of the internal controls (assuming that JDM will be performing tests of control).
• Two Computer Assisted Audit Techniques (CAATs) that Tyrone could request the IT auditors run to assist him in testing the valuation of inventory.

Answer rating: 100% (QA)

Substantive audit procedures using CAATs Use CAATs to 1 INITIAL PROCEDURE a Obtain an electronic ver... View the full answer