Question

As an internal auditor, you have been assigned to evaluate the controls and operation of a...

As an internal auditor, you have been assigned to evaluate the controls and operation of a computer payroll system. To test the computer systems and programs, you submit independently created test transactions with regular data in a normal production run.

What would be transactions in a payroll system?

What is this audit technique called?

Give at least one other concurrent audit technique and how it could be applied specifically to the cycle your group was assigned to develop for the class project.

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Answer #1

The technique where dummy transactions are processed through clients software to verify the effectiveness of control built in, is called Test data which is a part of Computer Assisted Audit Technique (CAAT).

To verify the effectiveness of payroll system auditor can enter the following transactions:

1. By entering terminated employee data.

2. By inputting promoted employees data.

The other audit technique that can be used during the concurrent audit is Embedded Audit Facilities which means auditors own program code is embedded into the clients application software so that verification procedures can be done as required on data being processed.

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