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This paper not only outlines the basis for risk based approach to auditing but also its implications for carrying out audit work in the context of accounting information systems is discussed here below.
Businesses typically identify the risks which are facing their operations and auditors can base their evidence collection and validation of information process on the assessment of risks by businesses. Internal audit function of a business needs to ascertain the overall audit risk which refers to the likelihood of financial statements being misstated. The audit risk is a combination of three types of risks which are namely inherent risk, control risk and detection risk. Inherent risk implies the threat of material error or omission pertaining to an account or a class of transactions. Control risk covers the inability of the internal controls to detect and prevent material errors. Detection risk is the failure of audit procedures to unveil any material error, misstatement or even fraud in reporting. Both inherent and control risks determine the extent of detection risk. It is suggested that the higher the control risk is the lower is detection risk set by the auditors which may require greater substantive testing by them (Romney & Steinbart, 2005).
The risk based approach allows assessing the weaknesses in the accounting information systems and controls over such systems for determining the nature, extent, scope and timing of audit procedures. This allows auditors to assess the threats and opportunities in order to deliver better opinion on the information processed by their clients. The audit procedures not only restrict to the information manually prepared by different businesses but also extend to the accounting informational systems which are maintained by companies for data recording and reporting (Romney & Steinbart, 2005).
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There were three runways in use: 04/22, 13/31, and H1, all of which were listed as having “good” conditions. Eleven flights were en-route and scheduled for arrival between 17:12 and 17:25 EST; the first of these, a flight between Raleigh-Durham and LaGuadia, was scheduled to depart Raleigh-Durham at 12:56 EST but left at 16:11 EST, and was scheduled to arrive at KLGA at 14:30 EST and in fact landed at 17:06 EST.
Every organization tends to update its AIS in order to effectively meet the changing business needs. This paper will critically analyze all the three AIS options suggested in the given case scenario and recommend the most potential one for the company. An Overview of the Change Context The modern business environment is continuously changing and the same trend is visible in the interests of customers and investors.
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types: control tests-determine the accuracy of the internal controls and substantive tests-determine the fairness of the data in reflection to financial affairs of the organization (Alderson, 1993). Basically, this paper will provide guidelines or explanations on the importance
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The paper, Information Need For Accounting Information System AIS, will also suggest three to four ways in which organizational performance may be improved when information is properly managed within a business system and evaluate the level of system security needed to ensure information integrity within automated business systems.
6 Pages(1500 words)Research Paper
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