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An auditor finds that the entity's spreadsheet-based monthly close model contains a hard-coded subtotal that masks data errors. The MOST appropriate response is:
ATreat the spreadsheet as a key IPE; test its integrity, formulae and inputs; report any deficiencies under SA 265
BIgnore as immaterial
CConfirm with vendor
DSign as a clean opinion
Answer & Solution
Correct answer: A. Treat the spreadsheet as a key IPE; test its integrity, formulae and inputs; report any deficiencies under SA 265
1. Spreadsheets are end-user computing IPEs whose integrity must be tested under SA 500.
2. A formula masking errors is a control deficiency and must be reported under SA 265 if significant.
3. Ignoring or vendor-confirming the spreadsheet is improper.
_Source: ICAI BoS CA Final Paper 3, Ch 3 "Risk Assessment and Internal Control"_
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