Question

Which of the following is the most significant disadvantage of auditing around the computer rather than through the computer?

A.The time involved in testing processing controls is significant.
B.The cost involved in testing processing controls is significant.
C.A portion of the audit trail is not tested.
D.The technical expertise required to test processing controls is extensive.

Answer 1

The most significant disadvantage of auditing around the computer is that a part of the audit trail, which includes data processing controls, is not tested, potentially missing errors or fraud within the processing system.

Step-by-step explanation:

The most significant disadvantage of auditing around the computer rather than through the computer is C.A portion of the audit trail is not tested. When auditors audit around the computer, they focus on input and output without assessing the processing controls within the computer system itself. By doing so, they miss examining if the processing controls are functioning effectively, as they do not test the integrity of the transactions as they are processed. This could potentially conceal processing errors or fraudulent activities not evident from merely inspecting the input and output data. Therefore, a critical aspect of the audit trail that verifies the processing of data remains unchecked, increasing audit risk.