Question 1

Which of the following would lessen the effectiveness of the internal control in a computer system?

Accepted Answer

Allowing computer operators to have access to detailed program documentation would lessen the effectiveness of internal controls because they would have access to sensitive information that could allow them to manipulate the system and potentially commit fraud. The other options listed would actually enhance internal controls by ensuring custody of important documents and limiting access to sensitive information.

Question 2

In updating a computerised accounts receivable file, which one of the following would be used as a batch control to verify the accuracy of the postings of cash receipts remittances?

Accepted Answer

The sum of the cash deposits, plus the discounts taken by customers, would be used as a batch control to verify the accuracy of the postings of cash receipts remittances, as it accounts for the total amount that should be credited to accounts receivable.

Question 3

For good internal control, which of the following functions should not be the responsibility of the cashier?

Accepted Answer

Data processing should not be the responsibility of the cashier because it is a control function that should be independent of the cash handling function.

Question 4

Which of the following information is likely to be least important to an auditor who is reviewing the internal control of the data processing function?

Accepted Answer

The bit storage capacity is a technical detail that is not directly related to the internal control of the data processing function. The other options, however, are related to the control environment, control activities, and monitoring activities of the internal control system. Therefore, D is the least important information.

Question 5

The auditor obtains evidence supporting the notion that proper segregation of duties exists by:

Accepted Answer

By personally observing the employees who apply the control procedures, the auditor can directly verify that duties are properly segregated, ensuring that no single employee has control over all aspects of a transaction.

Question 6

Which of the following computer documentation would an auditor most likely utilise in obtaining an understanding of internal control?

Accepted Answer

Systems flowcharts provide a visual representation of the flow of data and processes within a computer system, making them useful for understanding internal control. Record layouts, program listings, and record counts provide information about specific data or programs, but do not provide a comprehensive understanding of internal control.

Question 7

Which of the following input controls is a numeric value computed to provide assurance that the original input value does not contain a transcription error?

Accepted Answer

A check digit is a numerical value computed and stored along with the input value to provide assurance that the original input value does not contain a transcription error. The check digit is calculated according to a specific algorithm and is typically added to the end of the input value. When the input value is entered into the system, the system calculates the check digit again and compares it to the stored check digit to verify that the input value is correct.

Question 8

An IT input control is designed to ensure that:

Accepted Answer

An IT input control is designed to ensure that data received for processing are properly authorised and converted to machine-readable form. This helps to prevent errors and unauthorized access to the system.

Question 9

When erroneous data are detected by computer program controls, such data may be excluded from processing and printed on an error report.The error report should most probably be reviewed and followed up by the:

Accepted Answer

The IT control group is responsible for ensuring the accuracy and integrity of data processing within an organization. When erroneous data are detected, reviewing and following up on error reports falls within their purview to maintain system reliability and compliance with data management policies.

Question 10

Totals of amounts in computer-record data fields that are not usually added, but are used only for data-processing control purposes, are called:

Accepted Answer

Hash totals are used for data-processing control purposes and are not typically added as usual totals. Record totals and field totals refer to more specific types of totals within a data record or field, while "processing data totals" is not a commonly used term.

Question 11

Which of the following is an example of a check digit?

Accepted Answer

A check digit is a digit added to a numerical code to make it easier to detect errors. Option B describes a digit that is determined based on the other digits in the code, making it an example of a check digit. The other options do not describe check digits.

Question 12

Which of the following information is likely to be of least importance to an auditor in obtaining an understanding of the internal control?

Accepted Answer

While the cost-benefit ratio of data processing operations is relevant to management decisions, it is of less importance to an auditor in obtaining an understanding of the internal control. The segregation of duties, control over source documents, and documentation maintained for accounting applications are all directly related to internal control and are more important for the auditor to understand.

Question 13

A limit test is a:

Accepted Answer

A limit test is specifically designed to test whether a numeric value is within a predetermined range or limit to ensure that it does not exceed the maximum allowable value. It is typically used in financial and accounting systems to prevent errors in calculations or transactions that could result in costly mistakes or fraudulent activities.

Question 14

Internal control procedures within the IT activity may leave no visible evidence indicating that the procedures were performed.In such instances, the auditor should test these controls by:

Accepted Answer

When there is no visible evidence of internal control procedures being performed, the auditor can test these controls by reviewing transactions submitted for processing and comparing them to related output. This is an effective way to assess whether the IT activity is performing the required internal control procedures. Choice A (making corroborative inquiries) and choice B (observing the separation of duties of personnel) may not provide enough information to assess the performance of internal control procedures. Choice D (reviewing the run manual) may not be relevant to the specific internal control procedures being evaluated.

Question 15

The use of a header label is most likely to prevent errors by the:

Accepted Answer

The answer of The use of a header label is...

Question 16

Which of the following activities would most likely be performed in the IT department?

Accepted Answer

Conversion of information to machine-readable form is a common activity performed in the IT department. This involves the use of various software and tools to convert analog or physical information into digital formats that can be used and processed by computer systems. The other activities listed may be performed by different departments or individuals, depending on the organizational structure and system architecture.

Question 17

Which of the following situations most likely represents a weakness in IT internal control?

Accepted Answer

The answer of Which of the following situations most likely...

Question 18

Which of the following procedures is essential to determine whether effective internal control policies and procedures have been prescribed and are being followed?

Accepted Answer

Understanding the internal control and performing tests of controls is essential to determine whether effective internal control policies and procedures have been prescribed and are being followed. This involves gaining an understanding of the design and implementation of internal control, evaluating the effectiveness of those controls, and determining whether any deficiencies exist. The other choices (A, B, and D) may be helpful in understanding internal control policies and procedures, but do not necessarily involve testing or evaluating their effectiveness.

Question 19

After obtaining an initial understanding of a client's IT controls, an auditor may decide not to perform tests of controls related to the control procedures within the IT section of the client's internal control.Which of the following justifications would not be a valid reason for choosing to omit tests of controls?

Accepted Answer

The auditor deciding not to perform tests of controls because the controls appear adequate is not a valid reason for omitting tests of controls. The appearance of adequacy does not provide assurance that the controls are effective without testing.

Question 20

A procedural control used in the management of a computer centre to minimise the possibility of data or program file destruction through operator error includes:

Accepted Answer

External labels are a procedural control used to minimize the possibility of data or program file destruction through operator error by ensuring that the correct and intended media (like tapes or disks) are being used for data processing tasks.

Quiz 7: Understanding and Assessing Internal Control