During the audit of Long Ltd., the auditor came across the following instances:The finance team relies on a system-generated customer ageing report…

S. No. Particulars Type Description (i) The finance team relies on a system-generated customer ageing report while reviewing overdue balances of trade receivables. Reports System generated reports are information generated by IT systems. These reports are often used in an entity's execution of a manual control, including business performance reviews, or may be the source of entity information used by us when selecting items for testing, performing substantive tests of details or performing a substantive analytical procedure. E.g. (Vendor master report, customer ageing report) (ii) The payroll module is designed in such a way that the person entering employee attendance cannot approve the salary disbursement, thereby enforcing segregation of duties. Security Security including segregation of duties is enabled by the IT environment to restrict access to information and to determine the separation of roles and responsibilities that could allow an employee to perpetrate and conceal errors or fraud, or to process errors that go undetected. (iii) The purchase order system of the company does not allow processing of duplicate vendor codes and automatically rejects entries where the vendor GST number is already present. Automated Controls Automated controls are designed into the IT environment to enforce business rules. For example, Purchase order approval via workflow or format checks (e.g., only a particular date format is accepted), existence checks (e.g., Duplicate customer number cannot exist), and/or reasonableness checks (e.g., maximum payment amount) when a transaction is entered. (iv) The ERP system automatically computes depreciation on fixed assets by applying the straight-line method based on the input values of cost, residual value, and useful life. Calculations Calculations are accounting procedures that are performed by an IT system instead of a person. For example, the system will apply the 'straight-line' depreciation formula to calculate depreciation of an asset (i.e., cost of the asset, less the residual value of the asset at the end of its useful life divided by the useful life of the asset) or the system will calculate the value of the amount invoiced to a customer by multiplying the item price times the quantity shipped.