The Results of a Generalized Audit Software Simulation of the Aging

question 4

Multiple Choice

The results of a generalized audit software simulation of the aging of accounts receivable revealed substantial differences in the aging contribution,even though grand totals reconciled.Which of the following should the IS auditor do first to resolve the discrepancy?

• A) Recreate the test, using different software.
• B) List a sample of actual data to verify the accuracy of the test program.
• C) Ignore the discrepancy because the grand totals reconcile and instruct the controller to correct program.
• D) Create test transactions and run test data on both the production and simulation program.

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Definitions:

Inventory Management

The process of ordering, storing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing such items.

Days' Sales

A measure that indicates how many days, on average, it takes a company to collect revenue after a sale has been made.

Retail Method

An estimating method used to calculate inventory cost, based on the retail price, to determine cost of goods sold and ending inventory.

Inventory Estimating

A method used to approximate the amount of inventory a business has without doing a detailed physical count, often applied in periodic inventory systems.