- 10 Marks
AAA – May 2021 – L3 – Q5b – Audit-related services | Assurance services
Discuss how audit software can be used to audit revenue and trade receivables and evaluate the extent of reliance on internal auditor's use of embedded software.
Question
Mike Developers’ Audit Manager is of the view that audit software can be used effectively in the audit of revenue and trade receivables. He has discussed this with the firm’s computer audit department and with Mike Developers’ Finance Director, and this approach has been agreed as a feasible one. Furthermore, the Finance Director has asked the internal audit team to investigate the possibility of installing embedded software to help the external auditors in their work.
Required:
i) Describe, giving examples, how audit software, in general, could assist the audit firm in their audit of revenue and trade receivables. (6 marks)
ii) Discuss the extent to which the external auditor could rely on the results of the internal auditor’s use of embedded software. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Audit Software, Embedded Software, Internal Audit, Revenue Audit, Trade receivables
- Level: Level 3
- Topic: Assurance services, Audit-related services
- Series: MAY 2021