When an auditor tests a computerized accounting system, which of the following is true of the test data approach?
A)Test data are processed by the entity's computer programs under the auditor's control.
B)Test data must consist of all possible valid and invalid conditions.
C)Testing a program at year end provides assurance that the entity's processing was accurate for the entire year.
D)Several transactions of each type must be tested.

Question

Quizplus · Accepted Answer

The test data approach involves processing test data which is designed by the auditor and processed by the entity's computer programs under the auditor's control. This approach helps the auditor to test the effectiveness and accuracy of the system in processing data under normal and abnormal conditions. Option B is incorrect because it is not necessary for test data to consist of all possible valid and invalid conditions. Option C is incorrect because testing a program at year-end does not provide assurance that the entity's processing was accurate for the entire year. Option D is also incorrect because it may not always be necessary to test several transactions of each type.

When an Auditor Tests a Computerized Accounting System, Which of the Following