Question 1

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

Accepted Answer

The integrated test facility method allows fictitious and actual transactions to be processed together, and the client operating personnel are unaware of the testing process. This method involves creating a separate system that mimics the production environment and simulates the processing of real transactions as well as test transactions. The results of the test transactions are compared against the results of the real transactions to ensure accuracy. Input controls matrix, parallel simulation, and data entry monitor are not designed specifically for processing fictitious and actual transactions together without the client's awareness.

Question 2

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

Accepted Answer

Entering invalid identification numbers or passwords tests whether the system properly rejects unauthorized access, directly assessing the functioning of access controls.

Question 3

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

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 4

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

Accepted Answer

Auditing around the computer involves verifying the accuracy of computer output by comparing it directly with the source documents, without evaluating the processing steps within the computer system.

Question 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

A systems analyst is responsible for evaluating existing systems, identifying areas for improvement, and designing new computerized processing systems and accompanying documentation. Programmers write software code, computer operators manage and monitor computer systems, and data conversion operators are responsible for transferring data between different systems.

Question 7

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

Accepted Answer

Computer operators should not maintain control of all software programs as it may lead to a conflict of interest and increase the risk of fraudulent activities. Separation of duties is an important control activity to ensure that one individual does not have complete control over a transaction or process. Requiring specific passwords to access online files and periodically rotating computer programmers are also appropriate control activities.

Question 8

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

Accepted Answer

The answer of Audit teams would least likely use computer-assisted...

Question 9

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

Accepted Answer

The answer of When audit teams test a computerized processing...

Question 10

The purpose of test data is to determine whether

Accepted Answer

Test data is used to verify if the controls in place are functioning as described in internal control questionnaires and program flowcharts. The other options are not the primary purpose of test data.

Question 11

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

Accepted Answer

The answer of Audit teams would most likely introduce test...

Question 12

The audit team made a copy of the client's sales and billing program early in the audit.Several times during the audit,the 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

Accepted Answer

This audit technique is called parallel simulation, where the auditor uses a copy of the client's program to process actual client data, and then compares the output with the client's system. This helps the auditor to verify the accuracy of the client's system by running the same data through an independent program. Therefore, the correct answer is B) Parallel simulation. The other options, such as generalized audit software, test data, and tagging transactions are different audit techniques that are not applicable in this scenario.

Question 13

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

Accepted Answer

File backup and retention is a computer operations control as it ensures data is preserved and can be restored in case of data loss or corruption.

Question 14

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

Accepted Answer

Computer operations controls focus on ensuring the correct files are used, secured, and can be reconstructed, but restricted access to the computing environment is more related to physical and logical access controls, not specifically to operations controls.

Question 15

Tests of controls in an advanced computerized processing system

Accepted Answer

Tests of controls in an advanced computerized processing system can be performed using actual transactions or simulated transactions. While it may be true that some procedures within the computerized processing system leave no visible evidence of having been performed, this does not make testing controls impractical or inadvisable. Simulated transactions can provide relevant evidence, and may even be necessary in some cases where actual transactions are not readily available.

Question 16

Which of the following ensures that the coding of data does not change when it is moved from one internal storage location to another?

Accepted Answer

The answer of Which of the following ensures that the...

Question 17

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

Accepted Answer

The answer of Techniques needed to select specific transactions of...

Question 18

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

Accepted Answer

End-user computing environments are typically less complex and less controlled than traditional data processing environments. Therefore, online editing and sight verification are not typically part of processing control procedures in these environments. Options A and B (Transaction logs and control totals) are common processing control procedures in all types of environments to help ensure the accuracy and completeness of data processing. Option C (comparing input to output) is also an important control procedure to validate that the processing has been done correctly.

Question 19

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?

Accepted Answer

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

Question 20

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

Accepted Answer

Storing backup files in a separate location ensures that the organization can reconstruct its financial records in case the original copies are lost or destroyed. Hardware controls, personnel independent of data input, and system flowcharts may improve overall control and accuracy, but they do not directly address the issue of reconstructing financial records in case of loss or destruction.

Quiz 20: Auditing in a Computerized Environment