Week 5 Assignment

Ch. 11 & 13 Textbook Exercises

ACC490

Learning Check 11-6

a. Briefly describe three strategies for testing internal controls when information technology is used for significant accounting processing.

1. Planning for a low control risk assessment based on application controls. These are automated controls, in which auditors test the manual follow-up of exceptions noted by application controls, test the computer general controls, and test the computer application controls.

2. Planning for a high risk assessment based on general controls and manual follow-up which gives emphasis to tests of details. Auditors learn about the effectiveness of the testing and design of application controls when they tests general controls. Identifying exceptions through inquired of...