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Auditing

Auditing assessment 3

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Zaakir Mahomed
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3 views2 pages

Auditing

Auditing assessment 3

Uploaded by

Zaakir Mahomed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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a) 1.

Complexity of the Client’s System: BraaMaster likely uses an


integrated ERP system for nationwide operations. CAATs are essential to
audit complex, automated controls (e.g., credit limits, discounts).

2. Volume of Transactions: High transaction volume (e.g., 120 units of


MBP001 sold) makes manual testing inefficient. CAATs enable 100%
testing of data.

3. Data Stored Electronically: Sales invoices, customer Ids (e.g., M017),


and pricing are stored digitally. CAATs can directly interrogate electronic
records.

4. Availability of Audit Team Skills: Auditors must be trained in tools like


ACL or IDEA to analyze sales data and recalculate invoice totals.

5. Compatibility of Software: The audit firm’s CAATs must interface with


BraaMaster’s ERP system (e.g., SAP/Oracle).

6. Need for Data Analytics: CAATs can identify trends (e.g., frequent
discounts, outliers in pricing) and anomalies (e.g., duplicate invoices).

7. Client Cooperation: BraaMaster must grant access to databases and


system documentation for CAATs to function effectively.

(b) CAATs Procedure Application to BraaMaster Example from Invoice

1. Data Extraction & Recalculation: Use GAS (e.g., ACL) to extract invoice
data and recalculate totals (Qty × Price). Verify if `120 × R104.00 =
R12,480` (not R2,480 as shown).

2. Test Data: Input test transactions (e.g., invalid Customer ID) to check
system controls. Test if the system rejects `Customer ID: Invalid123`.

3. Sequence Checks: Ensure invoices (e.g., 10022) are sequential and


match delivery notes (DN10037). Flag gaps (e.g., missing Invoice 10023).

4. Exception Reporting: Identify sales exceeding credit limits using the


debtors’ master file. Check if Customer M017’s total purchases exceed
their credit limit.

5. Duplicate Detection: Scan for duplicate invoices or order numbers


(e.g., PO10018). Detect repeated `ORDER NUMBER: PO10018`.

6. Validity Checks: Validate discounts (3% for early payment) are applied
correctly. Confirm discounts are only applied to invoices paid within
terms.
7. Analytical Procedures: Compare sales trends (e.g., spikes in `MRB001`
sales) to historical data. Investigate unusual sales volumes (e.g., 110
units of deboned ribs).

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