Acct 542 Audit Proposal Essay

1239 WordsApr 2, 20135 Pages
Audit Proposal Audit Proposal Kudler Fine Foods has many different types of audit to consider that could be used for each functional areas of AP, AR, inventory management and payroll. This brief has the purpose to distinguish among the types of audits that could be used for each process; to recommend the audit most appropriate for each process; to explain how the audits will be conducted; and to identify events that could prevent reliance on auditing through the computer. Types of Audit Due to increasing economic and financial growth, many types of audit have been incorporated throughout the development process of internal activities. Audits can be performed manually or they can incorporate technology. According to Hunton and…show more content…
The steps are to do a limit, range, validity and completeness check. Accounts Receivable. The appropriate IT audit for accounts receivable (A/R) is also the SAS 94 Audit. This is for the same reasons. Kudler will check different areas to see how to handle different errors as they arise and to be sure that the system is checking for the errors within a timely manner by using software review. Inventory. The appropriate IT audit for inventory is also SAS 94 audit. SAS 94 audit uses administration review to determine how accurate the inventory is and how accurate the transactions for inventory are. The steps that are taken for this is to identify any areas that may have fraudulent information. According to COSO (2010), Inventory is the most misstated asset in an IT audit, pg 18. Para 14. Payroll. The appropriate IT audit for payroll is also SAS 94 audit. SAS 94 audit software review uses the steps to test payroll in the same ways that it will test A/R and A/P. Kudler will have the ability to test payroll, A/R, and A/P in the same audit test and possibly at the same time. Events that could Prevent Reliance on Auditing through the Computer Since we have discussed what types of audits we recommended for each accounting process. We would now like to focus on certain events that can assist Kudler’s Fine Foods on the events that could prevent the reliance on auditing through a computer. The events that must

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