Identify additional controls that can be added

Reference no: EM133728909

So far, we have reiterated that sensitive client information is not to be uploaded to public instances of AI technology platforms. This may seem counterintuitive when we are uploading client business processes in this portion of the case. However, it is important to point out that most audit firmshave their own proprietary AI technology that is internally confined and monitored, allowing employees to ask more client-specific questions (subject to audit engagement letter allowable data use considerations). These are not to be posted to public instances.

As the tool does not have specific information about account balances, risk of material misstatements, industry factors, the client's business environment, nor other risk and fraud factors, including those external to the company (i.e., industry-specific), auditors must exercise their professional judgment to determine the appropriate procedures.

Requirements (total 100):

Please consider the following hypothetical situation: your engagement team was recently engaged to conduct the audit of a national manufacturing company, Keeping You Warm, LLC, that designs and manufactures cold-weather accessories including wool hats, gloves, and socks.

You are an audit associate assigned to the inventory process for this year's audit. You have just completed walk-through meetings with the client and are currently working through the initial risk assessment of the inventory process. Read through the Inventory Process Narrative.docx supplemental file received from the company's key inventory contact.

1) Use the company's inventory process narrative in the LLM, along with the current list of inventory controls in place (Inventory Control Listing.xlsx). Where are there potential gaps identified in controls? Identify additional controls that can be added to each step of the process. Please list the LLM's response below (10 points) and comment on the proposed controls. In your opinion, which are critical for the company to add (20 pints)?

2) Based on the company's current process narrative and controls already in place (not including the suggested controls in your response to #3), have the tool provide an initial risk assessment of the company's current-year inventory process in the aggregate (not separated by subprocess) (10 points). Use your professional judgment to comment on any oversights within the tool's response (20 points).

3) As your team is finalizing its audit plan for the year, ask the LLM what substantive procedures it recommends performing over the various inventory account balances, given all the above information. What procedures does it recommend?

4) Based on the recommended substantive procedures from the previous question, ask your LLM to generate an initial Prepared-by-Client (PBC) list to deliver to the client for interim and year-end procedures. A PBC list includes all of the various schedules, documents, or sample support needed in order to complete your audit procedures.

Reference no: EM133728909

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