Computers have become the primary means used to process financial accounting information and have resulted in a situation in which auditors must be able to use and understand current information technology (IT) to audit a client’s financial statements. Accordingly, knowledge of computer terminology, computer systems, and related audit procedures is tested both on the Business Environment and Concepts section and on the Auditing and Attestation section of the CPA exam.
A. The Auditor’s Consideration of Internal Control When a Computer Is Present
B. Computerized Audit Tools
Multiple-Choice Answers and Explanations
The following “Diagram of an Audit” was first presented and explained in the auditing overview section:
Computer processing (historically referred to as electronic data processing or EDP) does not necessitate modification of the diagram. However, the auditor’s consideration of internal control includes an assessment of computerized as well as manual controls. Also, audit procedures may include computerized and manual procedures for considering internal control and for performing substantive tests.
Because much of the IT information you need to know for auditing relates to IT systems, you should refer to the material that appears in Module 41, Information Technology, ...