What roles do information systems and systems of internal control play in the high-level model of business discussed in the chapter, and why might it be important for an auditor to understand these roles?
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total answers (1)
Accounting
- The information system must maintain a record of all businesses transactions.
- It should be capable of producing accurate financial reports to summarize the effects of the entity's transactions.
- Among other things, internal control is required to ensure that a proper environment is established and that transactions are appropriately conducted and recorded by the information system and company employees.
- Effective internal control provides safeguards to ensure the:
- Auditing standards require that the auditor obtain an understanding of the client's environment, including its internal control, in planning the nature, timing, and extent of testing.
need an explanation for this answer? contact us directly to get an explanation for this answer1. Reliability of financial reporting
2. Compliance with laws and regulations
3. The effectiveness and efficiency of operations.*