Question

Data Corporation has just computerized its billing and accounts receivable record keeping. You want to make maximum use of the new computer in your audit of Data Corporation. Which of the following audit techniques could not be performed through a computer program?

a. Tracing audited cash receipts to accounts receivable credits.
b. Selecting accounts to be confirmed on a random basis.
c. Examining sales invoices for completeness, consistency between different items, valid conditions, and reasonable amounts.
d. Resolving differences reported by customers on confirmation requests.

Answer 1

The audit technique that typically cannot be conducted by a computer program is the resolution of differences reported by customers. Human judgment is required for this task, unlike other automated processes like tracing transactions or randomly selecting accounts.

Step-by-step explanation:

The question concerns the audit techniques suitable for computer-assisted auditing of a company's billing and accounts receivable records. Of the options provided, the technique that could not typically be performed through a computer program is d. Resolving differences reported by customers on confirmation requests.

While a computer can assist in identifying discrepancies through automated matching and analysis, the process of resolving these differences often requires human judgment and direct communication with customers. Options a, b, and c are all tasks that can be automated using computer programs.

For example, tracing audited cash receipts to accounts receivable credits, selecting accounts on a random basis, and examining invoices for completeness and validity can all be performed using specialized audit software.