[Anonymous]

Aren’t parallel simulation and embedded audit module the same thing? According to Wiley MCQ answer explanations, they seem to be different.

Also, why is parallel simulation not good for continuous testing? Doesn’t it by definition runs the program simultaneously, so you can continuously monitor it?

[hneagle1]

They seem like they would be the same thing, but there is a slight difference in how they both operate.

A parallel simulation is a simulation which is contained a program that is off site of the client's computer systems, whereas a embedded audit module is actually within the system.

I like to imagine the example of two cars, in parallel simulation you have two exact cars driving beside each other (same car, same process, same audit trail). But, in a embedded audit module, it would be the same car (one system).

I think Wiley gave you that explanation because in a parallel simulation, the auditor has to put test data through the parallel simulation whereas in a audit module the system is directly within the client's systems and spits out information that should be tested further. In an audit module, the auditor of course has to monitor the system, but since it is embedded directly with the client, it gets information faster on an up to date basis. Kind of a weird example, but hope it works!

FAR - 82 (8/30/14)
AUD - 95 (10/7/14)
REG - 82 (11/7/14)
BEC - 85 (11/26/14) - PEACE OUT!
Roger CPA, WTB, Becker, and Ninja Notes (with added prayer, tears, and hope!)

[NeedToPassAudit]

@Determined_To_Succeed

I have struggled with this as well. I believe Becker may explain this a little better:

Embedded Audit Modules are sections of application program code that collect transaction data for the auditor. They give an example where all transactions affecting a specific account that are in excess of $500 are automatically selected. Also Embedded Audit Modules are built into the application program when the program is developed.

Parallel Simulation = Re-performance test. Auditor re-processes some or all of the client's live data using software provided by the auditor and then compares the results with the client's files.

To answer your second question, since embedded audit modules are built into the program, they would by default, be perfect for continuous testing. However, since a parallel simulation requires work to be performed by the auditor (re-performance test) my guess is that it would cost more audit time to achieve the same level of Audit Risk. In other words, it may be more efficient to perform substantive testing to achieve the same level of Audit Risk instead of reallocating the time to continuously testing the client's internal controls.

I hope this helps. Good luck on the 29th, my day of suffering is on the 26th.

FAR 80
REG 88
BEC 86
AUD 98

Thank GOD!

[Anonymous]

Thanks for the responses. And good luck to you as well.

[Author]

Replies