(Objectives 12-1, 12-2, 12-5) Most grocery stores use bar code scanning technologies that interface with cash registers used to process customer purchases. Cashiers use the scanners to read bar code labels attached to each product, which the system then uses to obtain unit prices, calculate transaction totals, including sales taxes, and update perpetual inventory databases. Similarly, cashiers scan bar codes on coupons or member discount cards presented by the customer to process discounts. Along with the scanning technologies, groceries use point-of-sale technologies that allow customers to swipe debit and credit cards for payment, while still maintaining the ability for customers to pay with cash.
a. Which financial statement accounts are impacted by the use of these technologies in a typical grocery store?
b. Identify risks inherent to this business process in a grocery store that might affect the financial statement accounts identified in part a. For each risk, describe how these technologies help reduce the inherent risk.
c. How does the use of these technologies create new risks for a grocery store?
d. How might an auditor use technology to test the operating effectiveness of a bar code scanner based check-out system?
Objective 12-1
Describe how IT improves internal control.
Objective 12-2
Identify risks to accounting systems specific to IT.
Objective 12-5
Use test data, parallel simulation, and embedded audit module approaches to test automated controls.
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