The Bank of New Haven relies heavily on computers to calculate the settlements of amounts due to other banks.Given that the process is highly automated,the auditor would not be able to obtain sufficient evidence with substantive procedures.The auditors of the Bank of New Haven should
A)design and perform tests of controls.
B)qualify the opinion for the section on settlements.
C)hire a specialist to give an opinion on the proper functioning of the system.
D)perform a walkthrough of the system.

Question

Quizplus · Accepted Answer

Since the process is highly automated, the auditors should design and perform tests of controls to ensure that the system is functioning properly and accurately calculating settlements. This approach will provide reasonable assurance that the system is functioning as intended and that there are no material misstatements in the financial statements related to settlements.

The Bank of New Haven Relies Heavily on Computers to Calculate