RSM427H1 Lecture Notes - Lecture 2: Financial Audit, E-Commerce, Audit Risk
Document Summary
Effect of computer processing: transaction trails may not exist, uniform processing of transactions eliminates random errors but may cause systematic errors. Initiation or subsequent execution of transactions by computer. It controls auditing is part of the audit of general purpose financial statements as controls affect the financial statements. None: auditor can influence ar through influencing dr. Ir is the likelihood of an undesirable event occurring in the absence of controls. Management: set at moderate level for the financial statement audit, high level unacceptable: unable to rely on controls. It effect on dr: dr is the risk of audit procedures failing to detect significant errors or control deficiencies. It can increase dr because audit trail is less visible, data structure is more complicated and systems are more integrated. It can decrease dr, such as computer assisted audit techniques allow for: more audit coverage, a stronger basis for audit conclusion.
