Acme Tires Ltd. You are an IT audit senior employed by Olsen & Abrams, Chartered Public Accountants (CPAs). You have been asked to provide an assessment of control risk for the audit of the fina 2
Acme Tires Ltd.
You are an IT audit important occupied by Olsen & Abrams, Chartered Social Accountants (CPAs). You bear been asked to produce an rate of regulate betray for the audit of the financial statements of Acme Tires Ltd. and to fulfill any subjoined audit procedures aggravate the anterior year that capacity be required. For regulate weaknesses that are to be reported to treatment, you bear been asked to produce recommendations for advancement.
Acme is a air-tight held special crew, delay its proximate fiscal year ended September 30, 2019. Acme parts automobile and deal tires from multiform manufacturers opposing Canada. Acme has been an audit client of your assure for unanalogous years and has traditionally been beneficial, although net proceeds this year has dropped by encircling 15%.
Based on your critique of the agoing papers (including multiform memoranda and critique notes responsive by the audit staff and the agreement companion) and the projected financial statements and audit theory, you bear distinguished the forthhence issues that bear arisen during the gone-by year:
1. Acme has five exceedingly automated tract-of-landal disposal capitals that part to hundreds of persomal sellers of tires. Each tract-of-landal capital besides has ―repository sale daysǁ when the repository is known to the social, which can escheatment established tires that Acme is having distress selling to retailers at discounted prices. Acme has increased the quantity of the repository sale days to three days every two weeks. Because of staff cutbacks, it is the corresponding two employees that run this sale and handle the register for the sale.
2. Acme’s guide appointment is in Vancouver. The crew’s knowledge technology outsourcers, who maintain the new assure website implemented this year and stay Acme’s software, are besides located in Vancouver. Acme’s assure website has a customer gate that is used by numerous customers to regulate products, state the standing of an regulate, and to use faith cards to pay for their escheatment online.
3. Acme has the corresponding accounting software load tail implemented at indecent of its five disposal capitals. The fifth capital, Halifax, implemented a unanalogous accounting software load tail this year, using its exempt budget, gone it wanted to weaken costs in the accounting appointment. The tract-of-landal handler recurrent that the software vulgar by guide appointment is too unamenable to use.
4. Gone there bear been no elder knowledge systems acquisitions for unanalogous years, and none are planned, Acme disbanded its IT Steering Committee encircling three years ago. At that era, the committee had perfect some elder production complimentary updates to the crew’s retirement policies, confidence policies, employee knowledge systems practices,
disaster redemption plans, and long-term knowledge systems strategies. Discussion delay the CEO indicates that the crew believes it accomplish be compulsory to re-activate the committee in three to indecent years.
5. Each tract-of-land has a persomal area netproduction that includes two point-of-sale terminals (used for aggravate-the against sales and the repository sale days) and encircling 15 other stations.
6. Because of plummeting sales and revenues, the crew has mitigated its use contracts so that on-site subsistence of computing equipment is done quarterly rather than monthly. Some functions, such as anti-virus updates are automated. However, there was a height delay the Halifax network, and the Vancouver important accountant complained that he has of-late ordinary virus-infected spreadsheets from Halifax.
7. Payroll is handled using a estimable use construction that has thousands of accounts. The important accountant in Vancouver is lawful for payroll basis memorandum.
a) Expound five (5) IT regulate weaknesses that are to be reported to treatment, produce recommendations to treatment for advancement, and fulfill the contact on the audit. Fulfill any subjoined audit procedures aggravate the anterior year that capacity be required.
IT Regulate Weakness
Impact on the Audit
Recommendations to Treatment for
Additional Audit Procedures
b) Produce an aggravateall rate of the IT regulate betray at Acme Tires Ltd. Stay your reply delay conclusive reasons
c) Fulfill and expound matters that interest the audit mode in the hence year.