In which of the following situations would an auditor most likely use a strategy of reliance on internal control?
A)The systems analyst reviews output and controls the distribution of output from the IT department.
B)The entity has been slow to update its IT system to reflect changes in billing practices.
C)No paper trail is generated, as the entity receives sales orders, bills customers and receives payment based only on information generated from IT.
D)The auditor has been unable to determine whether all changes to a client's IT were properly authorised.

Question

Quizplus · Accepted Answer

In situation C, where the entity relies heavily on IT for its sales orders, billing, and payment processes without generating a paper trail, an auditor would likely use a strategy of reliance on internal control. This is because the effectiveness and efficiency of these processes are highly dependent on the proper functioning and integrity of the internal controls within the IT system.

In Which of the Following Situations Would an Auditor Most