Reference no: EM132480038

Scenario, Vignette 2.1:

Point 1: The auditor spent several days reviewing the documentation of the organization's purchase-order processing subsystem. the documentation was extensive, complete, and properly authorized by management. it was stored in carefully labeled file boxes in the information services library and was duly signed out to the auditor. the documentation appeared to provide much of the information needed by the auditor to evaluate the existing subsystem.

Point 2: However, something puzzled the auditor. he noticed a small discrepancy between an actual purchase requisition form and the description of the form as it appeared in the documentation. further investigation revealed discrepancies in other forms and then in computer program listings. eventually, it emerged that substantial changes had been made to the subsystem two years after it went into operation. none of these changes had been documented. inquiries revealed that a new controller had taken over development of the original subsystem and the subsequent modifications. the former controller had insisted on careful preparation and maintenance of accounting system documentation. but her successor had been under pressure to reduce costs and to the correct the problems in the purchase-order processing subsystem by making some changes. he had delayed documenting the changes. then other problems had arisen that needed correcting; five years later, the documentation had still not been corrected. unfortunately, the cost of the audit increased by 20 percent because the auditor had to create correct documentation for the existing system - documentation that should have been available when the audit started.

Thought Questions:

Question 1: what should the auditor recommend to the client with regard to documentation.

Question 2: how could the auditor have approached the problem in a way that might have encouraged cooperation from the client as well as reduced the cost of the audit?