acct612 week 7 discussion latest 2016 august

Week 7 discussion

Audit LD Step 2

Please discuss Step 2 of the Audit LD

Tests of Controls and Risk

The chapter mentions that testing of controls is very important. The auditor has two options:

1. Spend extra time testing controls in the hope they are strong and then reduce substantive tests later, if they are found to be strong.

2. Assume internal controls are weak and spend most of the time doing substantive tests.

Which of these approaches do you prefer? Why? Discuss the pros and cons of each of these approaches.

Auditing in a Computerized Environment

Two methods exist: Auditing around the computer and Auditing through the computer. Based on your readings, which of these methods do you prefer? Why? What are the potential advantages and disadvantages of each method?