Question

1) Why would an auditor want to extract high value and old items from the accounts

receivable file?

2) What is an advantage of the extractions command?

Answer 1

1. Reasons for extracting high value and old items by an auditor is as follows :-

A. The high value items are having more materiality.

B. In this type of items if company loss less number of items also there is a huge loss to the company.

C. In that high value items only employees are trying to make fraud.

D. The old records of items can be a source to the fraud . Some of the current frauds have their root cause with the old items.

E. For investigating all those frauds auditors serch the old accounts items.

F. The old records also gives the good knowledge about the bussiness of client so for that reason also auditor look in to old records of accounts.

2. The advantages of the extraction command.

A. Extraction command is used to retrieve data from a specific location in the hard drive or server of the system.

B. These command are used as computer aided audit trails.

C. With the usage of this command the we can retrieve the old data example we can retrieve 10 years old data also if servers stores that data.

D. We can extract read only copy if we feel that original may get corrupted if original was taken from the system.

F. By the use of this command we can perform the sampling also to select the transaction on which the audit procedure jas to be performed .

These are all the point regarding the given topics.

I hope, all the above given points and examples are useful and helpful to you.

Thank you.