参考答案：

(i)Benefits of using audit software

Standard systems at client

The same computerised systems and programs as used in all 25 branches of Tirrol Ltd. This means that the same audit

software can be used in each location providing significant time savings compared to the situation where client systems

are different in each location.

Use actual computer files not copies or printouts

Use of audit software means that Tirrol Ltd’s actual stock files can be tested rather than having to rely on printouts or

screen images. The latter could be incorrect, by accident or by deliberate mistake. The audit firm will have more

confidence that the ‘real’ files have been tested.

Test more items

Use of software will mean that more stock records can be tested – it is possible that all product lines could be tested for

obsolescence rather than a sample using manual techniques. The auditor will therefore gain more evidence and have

greater confidence that stock is valued correctly.

Cost

The relative cost of using audit software decreases the more years that software is used. Any cost overruns this year

could be offset against the audit fees in future years when actual expense will be less.

(ii)Problems in the audit of Tirrol Ltd

Timescale – six week reporting deadline –audit planning

The audit report is due to be signed six weeks after the year end. This means that there will be considerable pressure

on the auditor to complete audit work without compromising standards by rushing procedures.

This problem can be overcome by careful planning of the audit, use of experienced staff and ensuring other staff such

as second partner reviews are booked well in advance.

Timescale – six week reporting deadline –software issues

The audit report is due to be signed about six weeks after the year-end. This means that there is little time to write and

test audit software, let alone use the software and evaluate the results of testing.

This problem can be alleviated by careful planning. Access to Tirrol Ltd’s software and data files must be obtained as

soon as possible and work commenced on tailoring Cal & Co’s software following this. Specialist computer audit staff

should be booked as soon as possible to perform this work.

First year audit costs

The relative costs of an audit in the first year at a client tends to be greater due to the additional work of ascertaining

client systems. This means that Cal & Co may have a limited budget to document systems including computer systems.

This problem can be alleviated to some extent again by good audit planning. The manager must also monitor the audit

process carefully, ensuring that any additional work caused by the client not providing access to systems information

including computer systems is identified and added to the total billing cost of the audit.

Staff holidays

Most of the audit work will be carried out in July, which is also the month when many of Cal & Co staff take their annual

holiday. This means that there will be a shortage of audit staff, particularly as audit work for Tirrol Ltd is being booked

with little notice.

The problem can be alleviated by booking staff as soon as possible and then identifying any shortages. Where necessary,

staff may be borrowed from other offices or even different countries on a secondment basis where shortages are acute.

Non-standard systems

Tirrol Ltd’s computer software is non-standard, having been written specifically for the organisation. This means that

more time will be necessary to understand the system than if standard systems were used.

This problem can be alleviated either by obtaining documentation from the client or by approaching the software house

(with Tirrol Ltd’s permission) to see if they can assist with provision of information on data structures for the stock

systems. Provision of this information will decrease the time taken to tailor audit software for use in Tirrol Ltd.

Issues of live testing

Cal & Co has been informed that stock systems must be tested on a live basis. This increases the risk of accidental

amendment or deletion of client data systems compared to testing copy files.

To limit the possibility of damage to client systems, Cal & Co can consider performing stock testing on days when Tirrol

Ltd is not operating e.g. weekends. At the worst, backups of data files taken from the previous day can be re-installed

when Cal & Co’s testing is complete.

Computer systems

The client has 25 locations, with each location maintaining its own computer system. It is possible that computer

systems are not common across the client due to amendments made at the branch level.

This problem can be overcome to some extent by asking staff at each branch whether systems have been amended and

focusing audit work on material branches.

Usefulness of audit software

The use of audit software at Tirrol Ltd does appear to have significant problems this year. This means that even if the

audit software is ready, there may still be some risk of incorrect conclusions being derived due to lack of testing, etc.

This problem can be alleviated by seriously considering the possibility of using a manual audit this year. The manager

may need to investigate whether a ma