Accounting Information System and Control

Running head: ACCOUNTING INFORMATION SYSTEM AND CONTROL
Accounting information system and control
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1ACCOUNTING INFORMATION SYSTEM AND CONTROL
Table of Contents
Answer 1.....................................................................................................................................2
a. List of the fraud symptoms..............................................................................................2
b. Audit procedures required to be followed.......................................................................2
Answer 2.....................................................................................................................................3
a. Types of authentication....................................................................................................3
b. Advantages and disadvantages of various authentication systems..................................4
Answer 3.....................................................................................................................................6
a. System analysis and design problems..............................................................................6
b. Steps that should be taken for improving system performance and the user acceptance 6
References...................................................................................................................................8

2ACCOUNTING INFORMATION SYSTEM AND CONTROL
Answer 1
Auditors are required to enter expanded arena of the procedures for detecting fraud.
Auditors are required to gather information for identifying risks associated with material
misstatement owing to fraud and assess the risks after analysing the company’s controls and
programmes. Further, the auditors are required to overcome the natural tendencies like
overreliance on the representation made by the client and approach the audit procedures with
questioning mind and sceptical attitude (Donelson, McInnis and Mergenthaler 2016). In the
given case, it is determined that management of the company Heavy Earth-Moving Vehicles
Resales do not comply with the policy made by its Head office that requires that the sealed
bids shall be used for selling obsolete vehicles. Though the management assured that
negotiating with the knowledgeable buyers led to better sales price, in most of the cases it is
found that the vehicles were sold to the employees at significantly low value as compared to
the market (Louwers et al. 2015).
a. List of the fraud symptoms
 The company was not following established policy that required using sealed bids
systems for selling obsolete vehicles. Under the sealed bids system bids are not
disclosed to the competitors. Under this system, the sales are more transparent as
compared to open sales.
 Vigorous justification provided by the management regarding un-following the
established policy. The management must adhere to the established policies by the
company. Where any violation takes place the management shall provide valid proof
of the reasons why it is being violated (Brazel and Schmidt 2018)
 Repairing the vehicles before selling the assets as salvage
b. Audit procedures required to be followed
 The auditor shall have reviewed all the documentation related to sales that will help in
identifying the purchaser of the vehicles and at what prices. It will further help in
comparing buyers with the list of the company employees.
 Sales register and associated documents should have been checked for determining
that the company received the fair values from the sales of vehicles. Comparisons can
be done with the help of comparing the ‘blue book’ with the sales price and sales
proceeds received from sealed bids. Further, actual values of the vehicles and their