Question 1

Techniques needed to select specific transactions of audit interest for testing would not include
A) embedded audit modules.
B) monitoring system activity.
C) snapshot.
D) test data.

Accepted Answer

D

Question 2

When audit teams test a computerized processing system,which of the following is true of the test data approach?
A) Several transactions of each type must be tested.
B) Test data are processed by the client's computer programs under the audit team's control.
C) Test data must consist of all possible valid and invalid combinations.
D) The computer program used to process test data is different from the program used throughout the year by the client.

Accepted Answer

B

Question 3

Which of the following organizational positions would evaluate the existing system and design new computerized processing systems and documentation?
A) Programmer
B) Systems analyst
C) Computer operator
D) Data conversion operator

Accepted Answer

A systems analyst is responsible for evaluating the existing system and designing new computerized processing systems and documentation. A programmer is responsible for writing new software or modifying existing software according to predetermined specifications. A computer operator is responsible for monitoring and maintaining computer systems and related equipment. A data conversion operator is responsible for converting data from one format to another.

Question 4

The reprocessing of actual data using programs developed by the audit team to evaluate program controls is called
A) test data.
B) test deck.
C) generalized audit software.
D) parallel simulation.

Accepted Answer

Parallel simulation involves reprocessing actual data using auditor-developed programs to evaluate the effectiveness of program controls.

Question 5

Which of the following methods allow fictitious and actual transactions to be processed together without client operating personnel being aware of the testing process?
A) Integrated test facility
B) Input controls matrix
C) Parallel simulation
D) Data entry monitor

Accepted Answer

Integrated test facility allows for fictitious and actual transactions to be processed together without client operating personnel being aware of the testing process. Input controls matrix is a tool for documenting the existence and effectiveness of input controls and does not involve processing transactions. Parallel simulation involves running a separate system in parallel with the existing system to test its effectiveness and is not covert. Data entry monitor is a control mechanism to identify and correct data entry errors and would not involve processing fictitious transactions.

Question 6

The audit team made a copy of the client's sales and billing program early in the audit.Several times during the audit,the audit team used this copy of the program to process actual client data.The output of the secured program was compared to that of the client's system.This audit technique would be considered
A) generalized audit software.
B) parallel Simulation.
C) test data.
D) tagging transactions.

Accepted Answer

The audit technique described in the scenario is parallel simulation, where the audit team uses a copy of the client's program to process actual client data and then compares the output to that of the client's system. Generalized audit software is a tool used to perform data analysis on large data sets. Test data is a type of audit evidence where known data is processed through a system to test its accuracy. Tagging transactions involves identifying specific transactions for further review or analysis. None of these audit techniques describe the scenario presented in the question, which is parallel simulation.

Question 7

Audit teams would most likely introduce test data into a computerized payroll system to test internal controls related to the
A) existence of unclaimed payroll checks held by supervisors.
B) early cashing of payroll checks by employees.
C) discovery of invalid employee identification numbers.
D) proper approval of overtime by supervisors.

Accepted Answer

Test data is used to verify that the system correctly identifies and processes valid and invalid data. In this case, it would help ensure that the system can detect invalid employee identification numbers, which is a key internal control.

Question 8

Computer operations controls are typically implemented for files and data used in processing.The major objectives of these controls include each of the following except for
A) ensure that appropriate files are used in computerized processing.
B) ensure restricted access to the computing environment.
C) ensure that files are appropriately secured and protected from loss.
D) ensure that files can be reconstructed from earlier versions of information used in processing.

Accepted Answer

The other objectives listed (A, C, and D) all relate to ensuring the accuracy and integrity of files and data used in computerized processing. However, "ensuring restricted access to the computing environment" refers more to access controls rather than operations controls specifically related to files and data.

Question 9

Which of the following is a general control that would most likely assist an organization whose systems analyst resigned during the development of a major project?
A) Grandfather-father-son file retention
B) Input and output validation routines
C) Systems documentation
D) Check digit verification

Accepted Answer

Systems documentation would be the most helpful in this scenario as it would assist the organization in understanding the progress of the project thus far and the work that still needs to be completed. Without the systems analyst, having thorough documentation would allow for an easier transition to a new analyst and help prevent any potential delays or errors in the development process. The other options listed are specific controls that serve different purposes and would not directly address the issue at hand.

Question 10

In end-user computing environments,the processing control procedures would ordinarily not include
A) transaction logs.
B) control totals.
C) comparing input to output.
D) online editing and sight verification.

Accepted Answer

While transaction logs, control totals, and comparing input to output are all common processing control procedures used in end-user computing environments, online editing and sight verification are not typically included in these procedures. Online editing and sight verification are more commonly used in real-time processing systems where operators are actively involved in the processing tasks. In end-user computing environments, the processing tasks are typically automated and require less direct human involvement.

Question 11

The effectiveness of general controls is an important consideration for audit teams when assessing control risk on an audit.Which management assertions are primarily affected by general controls?
A) Completeness and Accuracy
B) Occurrence and Rights and Obligations
C) Accuracy and Occurrence
D) Completeness and Occurrence

Accepted Answer

The answer of The effectiveness of general controls is an...

Question 12

Which of the following is not an appropriate statement with regard to computer control activities?
A) The duties of application programming, computer operation, and control of data files should be separated.
B) Computer operators should maintain control of all software programs.
C) Specific passwords should be required to access online files.
D) Computer programmers should be periodically rotated across different applications.

Accepted Answer

Computer operators should not maintain control of all software programs as it poses a risk of potential misuse. Control of software programs should be restricted to only authorized personnel as per the organization's security policies and procedures.

Question 13

To obtain evidence that controls over access to computer programs are properly functioning,audit teams most likely would
A) create checkpoints at periodic intervals after data processing to test for unauthorized use of the system.
B) examine the transaction log to discover whether any transactions were lost or entered twice due to a system malfunction.
C) enter invalid identification numbers or passwords to ascertain whether the system rejects them.
D) vouch a random sample of processed transactions to assure proper authorization.

Accepted Answer

Testing the system's ability to reject invalid identification numbers or passwords directly assesses whether access controls are functioning as intended.

Question 14

Each of the following automated application controls are designed to ensure that the input of individual transactions and data is accurate except for
A) check digits.
B) valid sign tests.
C) sequence tests.
D) limit and reasonableness tests.

Accepted Answer

Sequence tests are designed to ensure that transactions are processed in the correct order, not specifically to ensure the accuracy of individual transaction input.

Question 15

The purpose of test data is to determine whether
A) the audit team's test data are consistent with the client's normal transactions.
B) controls operate as described in responses to internal control questionnaire items and program flowcharts.
C) every possible error is prevented or detected by the client's computer controls.
D) all possible combinations of valid data are correctly processed.

Accepted Answer

The purpose of test data is to determine whether controls operate as described in responses to internal control questionnaire items and program flowcharts. It is not intended to prevent or detect every possible error or to test every possible combination of valid data. Additionally, the use of test data is to evaluate the consistency of the audit team's test data with the client's normal transactions, but this is not the primary purpose.

Question 16

Which of the following is an example of a computer operations control?
A) Control totals
B) Balancing input to output
C) File backup and retention
D) Transaction logs

Accepted Answer

The answer of Which of the following is an example...

Question 17

Audit teams would least likely use computer-assisted audit techniques to
A) access client data files.
B) prepare spreadsheets.
C) assess control risk related to computerized processing systems.
D) construct and perform parallel simulations.

Accepted Answer

Audit teams would least likely use computer-assisted audit techniques to assess control risk related to computerized processing systems because this is a manual process that requires the auditor to understand the system and its controls.

Question 18

Tests of controls in an advanced computerized processing system
A) can be performed using only actual transactions because testing simulated transactions does not provide relevant evidence.
B) can be performed using actual transactions or simulated transactions.
C) is impractical because many procedures within the computerized processing system leave no visible evidence of having been performed.
D) is inadvisable because it may distort the evidence in real-time systems.

Accepted Answer

Tests of controls in an advanced computerized processing system can be performed using actual transactions or simulated transactions as both provide relevant evidence. While it is true that some procedures within the computerized processing system leave no visible evidence of having been performed, this does not render the testing of controls impractical. Furthermore, there is no evidence to suggest that performing tests of controls in real-time systems is inherently inadvisable.

Question 19

Which of the following controls most likely would ensure that an organization can reconstruct its financial records?
A) Hardware controls are built into the computer by the computer manufacturer.
B) Backup files are stored in a location separate from original copies.
C) Personnel who are independent of data input perform parallel simulations.
D) System flowcharts provide accurate descriptions of computer operations.

Accepted Answer

Storing backup files in a separate location ensures that in the event of data loss or corruption, the organization can retrieve the backup copies and reconstruct its financial records. This control is a crucial element of disaster recovery and business continuity planning. The other options do not directly relate to the ability to reconstruct financial records.

Question 20

An audit team's approach to evaluating computerized processing systems that compares source documents to the computer output is known as auditing
A) around the computer.
B) through the computer.
C) without the computer.
D) with the computer.

Accepted Answer

The approach of comparing source documents to the computer output is part of the "around the computer" audit approach, which focuses on the inputs and outputs of a computerized system rather than the system itself. The other answer choices (B, C, and D) do not accurately describe this approach.

Quiz 20: Auditing and Information Technology

Techniques needed to select specific transactions of audit interest for testing would not include

When audit teams test a computerized processing system,which of the following is true of the test data approach?

Which of the following organizational positions would evaluate the existing system and design new computerized processing systems and documentation?

The reprocessing of actual data using programs developed by the audit team to evaluate program controls is called

Which of the following methods allow fictitious and actual transactions to be processed together without client operating personnel being aware of the testing process?

Audit teams would most likely introduce test data into a computerized payroll system to test internal controls related to the

Computer operations controls are typically implemented for files and data used in processing.The major objectives of these controls include each of the following except for

Which of the following is a general control that would most likely assist an organization whose systems analyst resigned during the development of a major project?

In end-user computing environments,the processing control procedures would ordinarily not include

The effectiveness of general controls is an important consideration for audit teams when assessing control risk on an audit.Which management assertions are primarily affected by general controls?

Which of the following is not an appropriate statement with regard to computer control activities?

To obtain evidence that controls over access to computer programs are properly functioning,audit teams most likely would

Each of the following automated application controls are designed to ensure that the input of individual transactions and data is accurate except for

The purpose of test data is to determine whether

Which of the following is an example of a computer operations control?

Audit teams would least likely use computer-assisted audit techniques to

Tests of controls in an advanced computerized processing system

Which of the following controls most likely would ensure that an organization can reconstruct its financial records?

An audit team's approach to evaluating computerized processing systems that compares source documents to the computer output is known as auditing