The auditor may be able to use computer software to test the accuracy of each customer's account balance by taking each customer's beginning balance, adding sales made on account, subtracting payments received, and adding/subtracting other account adjustments to calculate each customer's ending balance.

Question

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This statement describes a common analytical procedure that auditors can perform using computer software to test the accuracy of customer account balances. By following the steps outlined, the auditor can calculate each customer's ending balance and compare it to the balance reported in the company's accounting records. Any discrepancies can then be investigated further to determine the cause and potential impact on the financial statements.

The Auditor May Be Able to Use Computer Software to Test