Total billing amounts on invoices are automatically transferred to an organization's account ledger weekly.
During an IS audit, the auditor discovers that one week's billing is missing from the ledger.
Which of the following areas should the auditor examine FIRST?
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A. B. C. D.C.
The missing week's billing from the account ledger could be indicative of a problem in the organization's internal controls or information system. The auditor should follow a systematic approach to investigate the issue and identify the root cause.
Among the given options, the auditor should first examine the batch processing controls (Option C) because they are responsible for the accurate and complete transfer of billing amounts to the account ledger. Batch processing controls ensure that all transactions are processed together in batches, which reduces errors and improves efficiency.
The auditor should examine the batch processing controls to ensure that the missing week's billing was not caused by a system or processing error. For example, the auditor should check whether the system batch job for that week's billing was successfully executed, or whether there were any system errors or anomalies during that processing period.
If the auditor finds issues with the batch processing controls, they should investigate further to identify the root cause and recommend corrective actions. For instance, the auditor might find that there is a configuration issue or a bug in the batch processing program that caused the missing billing amount. In this case, the auditor may recommend that the organization fixes the issue and tests the system thoroughly to ensure that it functions correctly.
However, if the auditor determines that the batch processing controls are functioning correctly, they may need to examine other areas, such as annual reconciliations (Option A), change management (Option B), or module access rights (Option D). These areas may be relevant if the missing week's billing was caused by human error or fraud, rather than a system or processing issue.
In conclusion, the auditor should examine the batch processing controls first when investigating a missing week's billing from an organization's account ledger during an IS audit. This will help the auditor to determine whether the issue is caused by a system or processing error, and identify the root cause for further investigation and remediation.