The Bank of New Haven Relies Heavily on Computers to Calculate

question 73

Multiple Choice

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.

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Definitions:

Gear Shift

A mechanical device in vehicles used to change gears manually, allowing the driver to control the vehicle's speed and power.

Warehouse Receipt

A receipt issued by a person engaged in the business of storing goods for hire.

Tendered

Offered formally or presented for acceptance.

Insolvent

Inability of a business entity to pay its debts as they become due in the usual course of business.