Smith Ltd has numerous customers. Each customer file contains name, address, credit limit and account balance. The auditor wishes to undertake a test of the programmed control that does not allow account balance to exceed credit limit. The best procedure for the auditor to follow would be to:
A) develop a program to compare credit limits with account balances and print out the details of any account with a balance exceeding its credit limit.
B) develop test data that would cause some account balances to exceed the credit limit and determine if the system properly detects such situations.
C) request a printout of a sample of account balances so they can be individually checked against the credit limits.
D) request a printout of all account balances so they can be manually checked against the credit limits.

Question

Quizplus · Accepted Answer

Developing test data to intentionally exceed credit limits allows the auditor to verify if the system's programmed control effectively detects and prevents such situations, ensuring the control is functioning as intended.

Smith Ltd Has Numerous Customers