Kudler Accounting Information System Case Study

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Register to read the introduction… The auditor must have a thorough understanding of the client, the industry, and the customer’s environment. Without this understanding, the auditor may not correctly identify the critical business processes and internal controls. By following this process, the auditors can “identify the controls that should be in place to safeguard the integrity of the process under audit” (Hunton et al., 2004, p. 210).

An SAS 94 audit will be conducted with the computer using a risk-based approach. Since Kudler uses their internal Intranet system to produce reports, it will be essential to the audit to use information contained in Kudler’s Accounting Information System (AIS). A major benefit of auditing with the computer that it allows the use of computer-assisted audit techniques (CAATs). The use of CAATs will save time conducting the audit. For any discrepancies, reportable conditions will be reported to management and follow-up procedures will be outlined. Auditing of the accounts receivable process will be based on third-party information. Customers of Kudler will be requested to provide information on their accounts with Kudler. Upon receiving the customers information, those amounts will be compared to the account balances within Kudler’s
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A list of all payees will be used and compared to the vendors Kudler from which Kudler has approved to purchase items and services. The system will also be reviewed to ensure only authorized employees can access the accounts payable database and make payments. Auditing of the payroll system will be based on reviewing the biometric system. Timestamps are created in the system whenever an employee scans their finger. The records are kept and will be compared to paystubs for various employees. Records kept for when the system malfunctions will be reviewed for accuracy as well. IT auditors will also review the employees that have access to the payroll records. The auditors will also look at the logs for those who accessed the payroll database. Auditing of the inventory system will be the most involved portion of the audit. The auditors will use third-party information from Kudler’s vendors and physical inventory counts. The purchase orders will be reviewed and compared to the accompanying payments to the vendors. The purchase order system will be reviewed for accuracy and to ensure compliance of the process. Auditing Through The

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