The Tests of Controls That the Auditor Would Perform in Meeting Audit Objectives - Assignment Example

Computer sciences and information technology a. How would you suggest the databases and data communications facilities beconfigured for First State Bank? Approach in improving the speed of the customer’s service on the stated segments is achievable only by consideration of the database configuration and correct configuring of the desired communication facilities attached or peripheral to the central system. Every change in the facilities that aims at increasing processor speed, providing partial storage capacity and provision of the consequent speed relay is highly considerable. After determining the processor speed of the central mainframe computer, further corrections would take on the mode of network structure or architecture. Use of fibre optics or any other swift data transfer model is highly suitable to ensure instant transmission of signals following process at every processor unit. The databases and the communications facilities should be configured to entail majorly two notable configurations that include a centralized configuration and parallel system. Centralized database configuration enables the clients to bank at any point of the stated 11 branches. Centralization of the activities aims considering every activity undertaken in every client’s respective bank account. It aims at minimisation of errors or failures which may see the bank lose huge chunks of money to the surrounding. All the processes of withdrawing cash from the branches should effectively be processed at one central point, and it should lead to updating of the client’s database effectively. The deposits of cash, remuneration or payment of customer bills and deposits of checks can as well be undertaken on the mainframe. Secondly, the databases and data communications facilities at First State Bank should be configured to allow for the parallel database that aims at creating a parallel processing and thus avail two main important properties. The main properties include high speed up and subsequent excellent scale up qualities. Parallel database allows for the sharing various peripherals that would equally allow for automatic teller machines process and checking process or even saving accounts. By coordination other branches PCs, all the process are amply undertaken without much difficulty (Hall & Hall, 2011). In conclusion, the centralized database configuration with inherent entailed parallel database will highly allow for the highest levels of intended high speed client service by the system. In proper combination with hardware and software updated systems, there will be excellent improvement in the system output in terms of processing speed and relay speed. a. Explain the importance of each of the six activities in promoting effective control. Systems authorization Systems authorization for Balcar Companys is an important process since it facilitates the effective development of the system. It further aims at facilitating conformation with the activities are applied constantly. System authorization helps in the utmost economic justification and entailed feasibility process. Strict adherence to the management’s policies to all systems development and projects are only possible through the incorporation of the systems authorization. Systems authorization is vital allocating ability in every office or personnel as regards the accountability profile of the company for control or making changes in the system (Hall & Hall, 2011). User specification User specification is important since it give allows each user of the system to maximize on what he desires most. Every user has his or her personal interest in the system development and therefore user specification ensures excellent delivery of the interest without delay or infrequent aid to the parties. Every specification helps in satisfaction of every user (Hall & Hall, 2011). Technical design Technical design helps in designing the user specifications into technical specifications where all the final cases can be executed into the workable system. The process entails the evaluation of system analysis, feasibility design, feasibility analysis and detailed system design. Internal audit participation Internal audit participation in the process of development of the system helps in controlling of the developmental activities especially if the firm lacks technical expertise. The Internal audit participation also acts as the liaison between the users and the system professional to ensure maximum transfer of knowledge. Program testing Program testing is helpful in the determination of inhibiting errors that may affect the functionality of the system. Program testing allows for debugging and removal of challenges that reduce the efficiency or any loophole that may lead to the fall or break down of the system (Meghanathan, 2012). User testing and acceptance User testing and acceptance provides a space for the user to verify if the system is truly helpful and has entailed all the desired provision that he wanted. The user testing allows for the verification if the SDLC activities entailed are in consistency with the management policies after which the user can then accept the system (Hall & Hall, 2011). Outline the tests of controls that the auditor would perform in meeting audit objectives. The auditor would perform three controls in meeting the audit objectives of Balcar Company. The main control test includes preventative, detective and corrective controls. Preventative control would provide the huge part of the first-line defense in the control structure of the company. Preventative control would provide significant passive techniques well aimed at the frequency of the occurrence (Kim, 2010). The provided preventative controls would hugely force high compliance with the prescribed events. Normally the preventative controls provide massive help to the process of availing the intense tests. Ensuring optimum adherence to the preventive test provides for deliberate and proper aid to the rising of the standards of the system. Under this test, majority of undesirable events are found and eliminated. Afterward is when detection and corrective tests are undertaken on the ensuring the highest possible standard of the system (Hall & Hall, 2011). a. Research the current state of XBRL and determine if this technology is appropriate to internal reporting projects such as this. The current state of XBRL is vital for the internal reporting projects listed. Use of XBRL has the capability of producing automatically reports and only demands a tiny range of programming investment. It avails highest standards of accuracy, currency of data, completeness and currency of data. The software also shows GL accounts and their consequent values which are then recorded with regards to the organizational internal requirement. It further presents mapping process with an aid of the simple tools or instrument like taxonomy mapper highlighting on the cash equivalents and inclusion of the short term investments. The technology allows for entry of ledgers and use of various inputs like receipts making it appropriate for the application in Ozment Company. The technology creates for avenues like journals that intensely include the use of the various sources, for instance, cash receipts, financial reporting sales, and order processing. The technology allows for verification of the details with the appropriate manager especially at the source department. Under the software process, segregation of duties is further possible as the ledger provides for the verification process (Hall & Hall, 2011). b. Identify the enhancements to current information and reporting that the company could realize by using XBRL. In the process of using XBRL, several enhancements to current information and reporting could be achieved by the company. In the process of using XBRL financial experts can produce or automate data process in the data collection process. The process allows for the simplified assembly of data or cheap and efficient sourcing of information and upgrading processes (Kim, 2010). The enhancements allow the AICPA members to streamline the process of preparation of the various business or even financial reports in the internal or external decision design process. The use of the XBRL allows for elevated or precise publishing of the financial information regarding investor or even regulators. The possible future use of the XBRL includes the reports regarding lenders, inherent regulating bodies, and even IRS. XBRL allows for the facilitation of the convergence of the accounting standards with the ability of aligning financial concepts derived from most public taxonomies (Hall & Hall, 2011). c. Discuss any data integrity, internal control, and reporting concerns associated with XBRL. According to (Hall & Hall, 2011), main data integrity, internal control and reporting concerns associated with XBRL include the use of documents in sequential manner. Job Ozment should ensure that Sources are well distributed in the user sequence manner. The model demands a physical security with regards to the history of the document inventory, and in case the sources are not in use then they should be locked away. There should always be a continual process of reconciling the source audits. Data coding controls check the integrity of the data codes that are entailed in the processing. The examples of data codes include customer account, chart of accounts and inventory item number. The emergence of all the three type errors may lead to the corruption of the eventual in this case causing a great amount of errors. The typical kinds of errors that could emerge from the process include the elimination of the transcription errors, single transposition errors and even multiple transposition errors. All the three errors could cause the intensive problems in the process of data processing if left undetected. Single transposition errors happen in the case any adjacent digits are reversed and multiple errors happen when non-adjacent figures are exchanged. Integrity is majorly increased through the use of checking process so as to remove the errors from the system. The similar problems in the inventory lead to ordering of the undesired products that may immensely create critical errors and irrelevance to the system. All the errors augmented may create a disruptive sequence to the flow of goods in the company (CCSEIT, 2011). The use of the check digit control ensures maintenance of the integrity of the use of the codes if in assigned in every subsequent processing. Every check digit processor is mainly placed as the suffix and even prefix. References Hall, J. A., & Hall, J. A. (2011). Information technology auditing and assurance. Mason, Ohio: Thomson/South-Western. Reilly, E. D. (2003). Milestones in computer science and information technology. Westport, Conn: Greenwood Press. International Conference on Computer Science and Information Technology, Meghanathan, N., Kaushik, B. K., & Nagamalai, D. (2011). Advanced computing: First International Conference on Computer Science and Information Technology, CCSIT 2011, Bangalore, India, January 2-4, 2011 : proceedings, part III. Berlin: Springer. Kim, T., Adeli, H., Robles, R. J., Balitanas, M., & AST . (2011).Advanced computer science and information technology: Third international conference ; proceedings. Berlin: Springer. CCSEIT 2011, Nagamalai, D., Renault, E., & Dhanuskodi, M. (2011). Trends in computer science, engineering and information technology: First International Conference on Computer Science, Engineering and Information Technology, CCSEIT 2011, Tirunelveli, Tamil Nadu, India, September 23-25, 2011, proceedings. Berlin: Springer. International Conference on Computer Science and Information Technology (2011- ), Meghanathan, N., Chaki, N., & Nagamalai, D. (2012). Advances in computer science and information technology: Computer science and engineering : second International Conference, CCSIT 2012, Bangalore, India, January 2-4, 2012. proceedings. Berlin: Springer. Kim, T., Adeli, H., & International e-Conference on Advanced Science and Technology. (2010). Advances in computer science and information technology: AST/UCMA/ISA/ACN 2010 conferences, Miyazaki, Japan, June 23-25, 2010 ; joint proceedings. Berlin: Springer. International e-Conference on Advanced Science and Technology, & Tomar, G. S. (2010). Advanced computer science and information technology: Second International Conference, AST 2010, Miyazaki, Japan, June 23-25, 2010 : proceedings. Berlin: Springer. Meghanathan, Natarajan, Chaki, Nabendu, & Nagamalai, Dhinaharan. (2012). Advances in Computer Science and Information Technology: Computer Science and Information Technology: Second International Conference, Ccsit 2012, Bangalore, India, January 2-4, 2012. Proceedings. 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