Question 1

The audit approach in which the auditor runs his or her own program on a controlled basis to verify the client's data recorded in a machine language is:
A) the test data approach.
B) called auditing around the computer.
C) the generalized audit software approach.
D) the microcomputer-aided auditing approach.

Accepted Answer

The answer of The audit approach in which the auditor...

Question 2

An auditor who is testing IT controls in a payroll system would most likely use test data that contain conditions such as:
A) time tickets with invalid job numbers.
B) overtime not approved by supervisors.
C) deductions not authorized by employees.
D) payroll checks with unauthorized signatures.

Accepted Answer

The auditor would use test data that contain conditions such as time tickets with invalid job numbers to test the IT controls in a payroll system. This is to ensure that the system is properly designed to detect and reject invalid transactions, which is an important control in preventing fraud and errors in payroll processing. The other options listed are also relevant to IT controls in a payroll system, but they may not be the best choice for test data depending on the specific controls being tested.

Question 3

Describe three computer auditing techniques available to the auditor.

Accepted Answer

The answer of Describe three computer auditing techniques available to...

Question 4

Which of the following is not seen as an advantage to using generalized audit software (GAS)?
A) Auditors can learn the software in a short period of time.
B) It can be applied to a variety of clients after detailed customizations.
C) It can be applied to a variety of clients with minimal adjustments to the software.
D) It greatly accelerates audit testing over manual procedures.

Accepted Answer

The answer of Which of the following is not seen...

Question 5

The objective of the computer audit technique known as the test data approach is to determine whether the client's computer programs can correctly process valid and invalid transactions.

Accepted Answer

The statement is correct. The test data approach involves the creation of test data containing valid and invalid transactions to assess the accuracy and reliability of the client's computer programs.

Question 6

Match eight of the terms (a-n)with the definitions provided below (1-8):
a.Application controls
b.Auditing around the computer
c.Auditing through the computer
d.Error listing
e.General controls
f.Generalized audit software
g.Hardware controls
h.Input controls
i.Output controls
j.Parallel simulation
k.Parallel testing
l.Pilot testing
m.Processing controls
n.Test data approach
________ 1.The new and old systems operate simultaneously in all locations.
________ 2.Controls that relate to all parts of the IT system.
________ 3.Involves the use of a computer program written by the auditor that replicates some part of a client's application system.
________ 4.A method of auditing IT systems which uses data created by the auditor to determine whether the client's computer program can correctly process valid and invalid transactions.
________ 5.Controls such as review of data for reasonableness,designed to assure that data generated by the computer is valid,accurate,complete,and distributed only to authorized people.
________ 6.Controls that apply to processing of transactions.
________ 7.A new system is implemented in one part of the organization while other locations continue to rely on the old system.
________ 8.Controls such as proper authorization of documents,check digits,and adequate documentation,designed to assure that the information to be processed by the computer is authorized,complete,and accurate.

Accepted Answer

The answer of Match eight of the terms (a-n)with the...

Question 7

Which of the following best describes the test data approach?
A) Auditors process their own test data using the client's computer system and application program.
B) Auditors process their own test data using their own computers that simulate the client's computer system.
C) Auditors use auditor-controlled software to do the same operations that the client's software does, using the same data files.
D) Auditors use client-controlled software to do the same operations that the client's software does, using auditor created data files.

Accepted Answer

The answer of Which of the following best describes the...

Question 8

Which of the following computer-assisted auditing techniques inserts an audit module in the client's application system to identify specific types of transactions?
A) Parallel simulation testing
B) Test data approach
C) Embedded audit module
D) Generalized audit software testing

Accepted Answer

Embedded audit module inserts an audit module in the client's application system to identify specific types of transactions. Parallel simulation testing and test data approach are other computer-assisted auditing techniques but do not involve inserting an audit module in the client's application system. Generalized audit software testing is a technique that uses pre-written software programs to analyze data, but does not involve inserting an audit module in the client's application system.

Question 9

General controls may include firewalls which are used to protect from:
A) erroneous internal handling of data.
B) insufficient documentation of transactions.
C) illogical programming commands.
D) unauthorized external users.

Accepted Answer

Firewalls are used to block unauthorized external users from accessing a network or system. They do not address issues related to internal handling of data, documentation of transactions, or programming commands.

Question 10

When the auditor is obtaining an understanding of the independent computer service center's internal controls the auditor should:
A) use the same criteria used to evaluate the client's internal controls.
B) use different criteria because the service center resides outside the company.
C) use the same criteria used to evaluate the client's internal controls but omit tests of transactions.
D) use different criteria for the service center by including substantive tests of balances.

Accepted Answer

The auditor should use the same criteria used to evaluate the client's internal controls when obtaining an understanding of the independent computer service center's internal controls. This is because the service center is still part of the client's IT environment and its controls can affect the client's financial reporting. However, the auditor may need to modify the control tests or procedures due to the service center's unique processes or characteristics.

Question 11

When using the test data approach:
A) test data should include data that the client's system should accept or reject.
B) application programs tested must be virtually identical to those used by employees.
C) select data may remain in the client system after testing.
D) none of the above statements is correct.

Accepted Answer

In the test data approach, the data used should include both valid and invalid data that the client's system should accept and reject, respectively. Option B is incorrect because the application programs tested do not have to be identical to those used by employees. Option C is incorrect because all test data should be removed from the client system after testing is complete to prevent any interference with normal operations.

Question 12

Rather than maintain an internal IT center,many companies outsource their basic IT functions such as payroll to an:
A) external general service provider.
B) independent computer service center.
C) internal control service provider.
D) internal auditor.

Accepted Answer

The answer of Rather than maintain an internal IT center,many...

Question 13

The embedded audit module approach requires the auditor to insert an audit module in the client's application system to to identify specific types of transactions.

Accepted Answer

The embedded audit module approach does require the auditor to insert an audit module in the client's application system to identify specific types of transactions.

Question 14

Generalized audit software is used to test automated controls.

Accepted Answer

Generalized audit software (GAS) can be used to test automated controls, such as validating the accuracy of calculations or verifying the completeness of data input. GAS allows auditors to examine large quantities of data quickly and efficiently, making it a valuable tool in auditing automated systems.

Question 15

Discuss the advantages and benefits of using generalized audit software.

Accepted Answer

The answer of Discuss the advantages and benefits of using...

Question 16

Parallel simulation is used primarily to test internal controls over the client's IT systems,whereas the test data approach is used primarily for substantive testing.

Accepted Answer

The statement is incorrect. Parallel simulation can be used for both testing internal controls and substantive testing, while the test data approach is primarily used for testing internal controls over the client's IT systems.

Question 17

When auditing a client who uses a database management system,the auditor is principally aware of elevated risk due to the fact that:
A) multiple users can access and update data files.
B) the accounting information is only in one place.
C) the database administrator may lack appropriate accounting knowledge.
D) multiple users could all access the data simultaneously causing a system shutdown.

Accepted Answer

With a database management system, multiple users can access and update data files simultaneously, increasing the risk of errors or fraud. It is important for the auditor to ensure that appropriate access controls and segregation of duties are in place to mitigate these risks. The other options may be risks or concerns to consider, but do not directly relate to the use of a database management system.

Question 18

What tools do companies use to limit access to sensitive company data?
A) 
B) 
C) 
D)

Accepted Answer

It is not clear what the codes in the answer options represent, but it can be assumed that option A is the correct answer since it is the only option provided. To limit access to sensitive company data, companies may use tools such as firewalls, access control lists, encryption, and password protection.

Question 19

A database management system:
A) allows clients to create databases that include information that can be shared across multiple applications.
B) stores data on different files for different purposes, but always knows where they are and how to retrieve them.
C) allows quick retrieval of data, but at a cost of inefficient use of file space.
D) allows quick retrieval of data, but it needs to update files continually.

Accepted Answer

A database management system allows clients to create databases that include information that can be shared across multiple applications. It is designed to efficiently store and retrieve data, while maintaining data integrity and security. It eliminates the need for data redundancy and minimizes data inconsistencies.

Question 20

Auditors often use Generalized Audit Software during their testing of a client's internal controls.For the following uses of the software provide a description and an example.
Verify extensions and footings
Print confirmation requests
Compare data on separate files

Accepted Answer

The answer of Auditors often use Generalized Audit Software during...

Quiz 12: Implications of Information Technology for the Audit Process

The audit approach in which the auditor runs his or her own program on a controlled basis to verify the client's data recorded in a machine language is:

An auditor who is testing IT controls in a payroll system would most likely use test data that contain conditions such as:

Describe three computer auditing techniques available to the auditor.

Which of the following is not seen as an advantage to using generalized audit software (GAS) ?

The objective of the computer audit technique known as the test data approach is to determine whether the client's computer programs can correctly process valid and invalid transactions.

Which of the following best describes the test data approach?

Which of the following computer-assisted auditing techniques inserts an audit module in the client's application system to identify specific types of transactions?

General controls may include firewalls which are used to protect from:

When the auditor is obtaining an understanding of the independent computer service center's internal controls the auditor should:

When using the test data approach:

Rather than maintain an internal IT center,many companies outsource their basic IT functions such as payroll to an:

The embedded audit module approach requires the auditor to insert an audit module in the client's application system to to identify specific types of transactions.

Generalized audit software is used to test automated controls.

Discuss the advantages and benefits of using generalized audit software.

Parallel simulation is used primarily to test internal controls over the client's IT systems,whereas the test data approach is used primarily for substantive testing.

When auditing a client who uses a database management system,the auditor is principally aware of elevated risk due to the fact that:

What tools do companies use to limit access to sensitive company data?

A database management system:

Auditors often use Generalized Audit Software during their testing of a client's internal controls.For the following uses of the software provide a description and an example. Verify extensions and footings Print confirmation requests Compare data on separate files