As you are planning the annual audit of Norton Corporation, you note that the company has a number of user operated computers in use in various locations. One of the machines has been installed in the stores department, which has the responsibility for disbursing stock items and for maintaining stores records. In your audit, you find that one employee receives the requisitions for stores, disburses the stock, maintains the records, operates the computer, and authorizes adjustments to the total amounts of stock recorded by the computer. When you discuss the applicable controls with the department manager, you are told that the user operated computer is assigned exclusively to that department. Therefore, the manager contends that it does not require the same types of controls applicable to large IT systems. a. Comment on the manager’s contention.

Carosel Limited is a specialty motor vehicle parts supplier, procuring parts from a large number of suppliers. As part of the interim audit work four weeks prior to the company year’s end, you are testing the procurement/purchases systems, attending the inventory count and examining the sales and cash receipts. Purchasing/Procurement System  When the quantity of a specific part falls below re-order level, an e-mail is sent to the procurement department detailing the part required and the quantity to order. Parts inventory is monitored by the store’s manager with a copy of the e-mail filed on the store manager's computer.  Procurement department staff check the e-mail, allocate the order to an authorised supplier and send the order to that supplier using Electronic Data Interchange (EDI). The order is identified by a unique order number with a copy of the EDI order filed in the order database by the computer system.   When goods are received at Carosel, the stores clerk confirms that…

Consider the following independent situations, all of which apply to audits of entities for the year ended 31 December 2019:   In July 2019, Alpha Ltd started using a new general ledger software package. The Financial Controller is impressed with the new system, because management accounts are easily produced and allow detailed comparisons with budgets and prior-period figures across product lines and geographical areas. The conversion to the new system went smoothly. As it is a popular computer package, it required only minor   As part of a computer systems conversion in Beta Ltd, the position of Systems Administrator was created. This position is responsible for all systems maintenance, including data backups and modifications. These tasks were previously the responsibility of the   Gamma Ltd is a large supermarket chain with outlets in all major cities in the country. In August 2019 Gamma Ltd contracted out its payroll data processing in each city to an independent computer…