Methods of testing the operating effectiveness of controls

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Any gross pay calculations in excess of $25,000 per month are identified and written to a rejected transaction file for separate investigation because Mark's highest paid employee whose salary is processed through the system earns $300,000 per year.

Consider the four methods of testing the operating effectiveness of controls (inquiry, observation, document examination, and re-performance). For this control, provide an example of how Mark's audit team might choose to test the operating effectiveness of the control using the four methods of test of controls (e.g., how would the audit team use inquiry, observation, document examination, and re-performance to test control #1, the generation and review of the system log?). [Note: Not all types of tests of controls will be appropriate for testing all the controls.]

Reference no: EM132201843

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