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Which of the following is the MOST defensible position on whether automation can fully replace ICOFR judgement in an Ind AS-compliant ERP environment?
ANo, and therefore ERP automation is of no value in an Ind AS-compliant environment
BYes, automation fully replaces ICOFR judgement once the ERP is configured with workflow controls
CNo — automation strengthens controls (SoD, access, workflows, audit trails) but management judgement on accounting estimates, alternative treatments and disclosures remains essential, with documented approvals and audit-committee communication
DYes, if the audit committee delegates judgement to the ERP system administrator
Answer & Solution
Correct answer: C. No — automation strengthens controls (SoD, access, workflows, audit trails) but management judgement on accounting estimates, alternative treatments and disclosures remains essential, with documented approvals and audit-committee communication
Automation handles repeatable, rule-based controls and surfaces exceptions; estimates, alternative-treatment elections and disclosure judgement remain management's responsibility, with formal approval and audit-committee communication. Full delegation (A, C) is wrong; dismissing automation entirely (D) ignores its proven control benefits.
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