Case 9-29 Solution: 1) The automated general ledger accounting software system audited on December 31, 2008 requires

no testing. The reasons behind it are as follows:  Testing of control had been done in the prior year and no changes have been made in the software since then.  Strong control over information technology (IT) security and software program adjustments were held. Besides, auditor should take into account testing of IT)

security and software program adjustments that might required in the current year audit because of their dependence on systems to avoid adjustments to the primary automated reconciliation control.

2) The accounts payable clerk conform the vendor invoice to related purchase order and receiving reports and examine any differences noted.  The system involves risk of having discrepancies with model of the control since system is not automated.  Thus, testing of control is necessary in the December 31, 2008 to investigate its capabilities in the current year's audit.

3) The control is modeled to test annually in order to reduce the significant threat. As a whole, testing is necessary in the December 31, 2008 audit even though it was examined in the December 31, 2006.

4) The adjustments have been made in the system during 2007 despite the fact that the perpetual inventory system is automated which makes the auditor to test in the current year audit of December 31, 2008.

5) The client's purchasing accounting system includes several automated controls, which have been tested by auditor in 2007.  The software was not updated since its acquisition. Thus no testing is required in the current year.  Even so auditor can test the IT security which is essential to be tested in the current year because of the dependence on the system to avoid changes to the primary automated reconciliation control.