Core Marker’s Comment Sheet
Course Name: Advanced External Auditing (AU2) Assignment: 2 Modules: 1 to 4
Overview of Module 3:
In your prerequisite auditing course, you learned that the financial statement auditor conducts the audit by preparing an audit plan in the context of an overall audit strategy. This strategy assesses risks, taking into account the size of the organization, the complexity and nature of client operations, and the objectives of the audit. This module builds on your understanding of the audit risk model and the audit process. The focus is on auditing the business as management operates it through the strategic systems auditing (SSA) approach. You learn how to revise the audit strategy in response to the nature of the client’s business and assessed risks. For example, you examine the effects of complex information systems and the quality of corporate governance over enterprise risk management, information systems security, and information technology management. You also relate the analysis of business performance to the financial statements.
Overview of Module 4:
In Module 4, you study the effect of information systems on control risk, considering both manual and automated procedures. After reviewing the overall effect on the financial statement audit and in particular on the audit of internal controls, you consider the phases of the COSO control framework. You also look at the types of controls and how these controls are audited for common information systems. The final topics address the role of service auditors’ reports for outsourced information systems as well as how and when the public accountant relies on the work of the internal auditor when auditing clients in a computerized environment.
Marker’s Comments:
Question 1 (5 marks)
a) The correct answer is 3. Continued collection problems could result in cash flow problems for
the