Smith Corporation has numerous customers.A customer file is kept on disk storage.Each account in the customer file contains name,address,credit limit,and account balance.The auditor wishes to test this file to determine whether credit limits are being exceeded.The best procedure for the auditor to follow would be to:
A)Develop test data that would cause some account balance to exceed the credit limit and determine if the system properly detects such situations.
B)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.
C)Require a printout of all account balances so they can be manually checked against the credit limits.
D)Request a printout of a sample of account balances so they can be individually checked against the credit limits.

Question

Quizplus · Accepted Answer

Option B is the best procedure for the auditor to follow as it involves developing a program that compares credit limits with account balances and prints out the details of any account with a balance exceeding its credit limit. This method is more efficient and reliable compared to manually checking each account or developing test data, which may not cover all possible scenarios. With the program, the auditor can easily identify accounts that exceed their credit limit and investigate them further.

Smith Corporation Has Numerous Customers