Jones Ltd has numerous customers. Each customer file contains name, address, credit limit and account balance. The auditor wishes to undertake a test of the automated control that does not allow account balance to exceed credit limit. The best procedure for the auditor to follow would be to: A. develop a program to compare credit limits with account balances and print out the details of any account with a balance exceeding its credit limit.
A) ANSB. develop test data that would cause some account balances to exceed the credit limit and determine if the system properly detects such situations.
B) request a printout of a sample of account balances so they can be individually checked against the credit limits.
C) request a printout of all account balances so they can be manually checked against the credit limits.

Question

Jones Ltd has numerous customers. Each customer file contains name, address, credit limit and account balance. The auditor wishes to undertake a test of the automated control that does not allow account balance to exceed credit limit. The best procedure for the auditor to follow would be to: A. develop a program to compare credit limits with account balances and print out the details of any account with a balance exceeding its credit limit.
A) 	ANSB. develop test data that would cause some account balances to exceed the credit limit and determine if the system properly detects such situations.
B) 	request a printout of a sample of account balances so they can be individually checked against the credit limits.
C) 	request a printout of all account balances so they can be manually checked against the credit limits.

Quizplus · Accepted Answer

The best procedure for the auditor would be to develop a program to compare credit limits with account balances and print out the details of any account with a balance exceeding its credit limit. This would automate the process and ensure that all accounts are checked accurately and efficiently. Developing test data or requesting printouts of account balances would be time-consuming and less effective methods. Checking all account balances manually would be too time-consuming and may not be practical.

Jones Ltd Has Numerous Customers