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CMA Intermediate · Corporate Accounting and Auditing · Application of Technology in Audit and Audit Trail

During the audit of Kaveri Textiles Ltd, the auditor finds that the audit trail feature was enabled at the application level of the ERP but was not enabled at the database level where direct data changes are possible. What is the most appropriate conclusion for reporting?

The auditor should report an exception that the audit trail feature did not operate throughout the year for all transactions, because database-level changes were not logged. Enabling it only at application level is incomplete, and restricted IT access does not substitute for a recorded edit log.

  1. AReport that the audit trail was not operated throughout the year for all transactions at the database level, as the feature was not fully operationalCorrect
  2. BReport no exception, because the application level covers all user entries
  3. CReport no exception, because database access is limited to the IT department
  4. DWithdraw from the engagement, as audit trail gaps always require resignation

Explanation

The audit trail must cover all transactions and operate throughout the year. If database-level changes can be made without being logged, the feature was not fully operational, so the auditor reports an exception. IT-department access does not remove the need for logging, and resignation is not mandated.

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