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CS Professional · Internal and Forensic Audit · Internal Audit Tools and Techniques

Sunrise Textiles Ltd has 2,40,000 purchase invoices for the year. The internal auditor wants to test every invoice for duplicate numbers from the same vendor instead of picking a sample. Which approach best suits this objective?

Running audit software on the full invoice file is best, because computer assisted audit techniques can test the entire population for duplicate vendor and invoice number pairs. Manual samples may miss duplicates, and management's assurance is not independent audit evidence.

  1. AManual vouching of a judgmental sample of 60 invoices
  2. BRunning audit software that scans the complete invoice file for duplicate vendor-invoice number combinationsCorrect
  3. CAsking the accounts payable head to confirm that no duplicates exist
  4. DReviewing only invoices above Rs 10 lakh by inspection

Explanation

CAATs allow the auditor to examine 100% of a population quickly. Duplicate detection across all 2,40,000 records is a classic use of audit software. A manual or judgmental sample can miss duplicates, and management's confirmation is not independent evidence.

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