Deck 17: IT Controls : Systems Development Program Changes and Application Controls

Question 1

A check digit is a method of detecting data coding errors.

Answer 1

True

Question 2

A run-to-run control is an example of an output control.

Answer 2

False

Question 3

In a computerized environment,all input controls are implemented after data is input.

Answer 3

False

Question 4

The white box tests of program controls are also known as auditing through the computer.

Question 5

Maintenance access to systems increases the risk that logic will be corrupted either by the accident or intent to defraud.

Question 6

The black box approach to testing computer applications allows the auditor to explicitly review program logic.

Question 7

Source program library controls should prevent and detect unauthorized access to application programs.

Question 8

Generalized audit software packages are used to assist the auditor in performing substantive tests.

Question 9

The results of a parallel simulation are compared to the results of a production run in order to judge the quality of the application processes and controls.

Question 10

Tracing is a method used to verify the logical operations executed by a computer application.

Question 11

When using the test data method,the presence of multiple error messages indicates a flaw in the preparation of test transactions.

Question 12

The base case system evaluation is a variation of the test data method.

Question 13

Shredding computer printouts is an example of an output control.

Question 14

The presence of a SPLMS effectively guarantees program integrity.

Question 15

Input controls are intended to detect errors in transaction data after processing.

Question 16

Programs in their compiled state are very susceptible to the threat of unauthorized modification.

Question 17

The user test and acceptance procedure is the last point at which the user can determine the system's acceptability prior to it going into service.

Question 18

The programmer's authority table will specify the libraries a programmer may access.

Question 19

Achieving batch control objectives requires grouping similar types of input transactions (such as sales orders)together in batches and then controlling the batches throughout data processing.

Question 20

Firms with an independent internal audit staff may conduct tests of the system development life cycle on an ongoing basis.

Question 21

Which statement is correct?

A) compiled programs are very susceptible to unauthorized modification
B) the source program library stores application programs in source code form
C) modifications are made to programs in machine code language
D) the source program library management system increases operating efficiency

Question 22

An input control that tests time card records to verify than no employee has worked more 50 hours in a pay period is an example of a range test.

Question 23

Spooling is a form of processing control.

Question 24

Which control is not a part of the source program library management system?

A) using passwords to limit access to application programs
B) assigning a test name to all programs undergoing maintenance
C) combining access to the development and maintenance test libraries
D) assigning version numbers to programs to record program modifications

Question 25

The correct purchase order number,is123456.All of the following are transcription errors except

A) 1234567
B) 12345
C) 124356
D) 123454

Question 26

Program testing

A) involves individual modules only, not the full system
B) requires creation of meaningful test data
C) need not be repeated once the system is implemented
D) is primarily concerned with usability

Question 27

A salami fraud affects a large number of victims,but the harm to each appears to be very small.

Question 28

Which control ensures that production files cannot be accessed without specific permission?

A) Database Management System
B) Recovery Operations Function
C) Source Program Library Management System
D) Computer Services Function

Question 29

Which of the following is an example of input control test?

A) sequence check
B) zero value check
C) spooling check
D) range check

Question 30

Use of the integrated test facility poses no threat to organizational data files.

Question 31

An example of a hash total is

A) total payroll checks-$12,315
B) total number of employees-10
C) sum of the social security numbers-12,555,437,251
D) none of the above

Question 32

Routine maintenance activities require all of the following controls except

A) documentation updates
B) testing
C) formal authorization
D) internal audit approval

Question 33

Which of the following is not an example of a processing control?

A) hash total.
B) record count.
C) batch total.
D) check digit

Question 34

Which statement is not correct? The goal of batch controls is to ensure that during processing

A) transactions are not omitted
B) transactions are not added
C) transactions are free from clerical errors
D) an audit trail is created

Question 35

Which of the following is correct?

A) check digits should be used for all data codes
B) check digits are always placed at the end of a data code
C) check digits do not affect processing efficiency
D) check digits are designed to detect transcription and transposition errors

Question 36

Which statement is not correct? The audit trail in a computerized environment

A) consists of records that are stored sequentially in an audit file
B) traces transactions from their source to their final disposition
C) is a function of the quality and integrity of the application programs
D) may take the form of pointers, indexes, and embedded keys

Question 37

Which control is not associated with new systems development activities?

A) reconciling program version numbers
B) program testing
C) user involvement
D) internal audit participation

Question 38

Which statement is not true? A batch control record

A) contains a transaction code
B) records the record count
C) contains a hash total
D) control figures in the record may be adjusted during processing
E) All the above are true

Question 39

Which input control check would detect a payment made to a nonexistent vendor?

A) missing data check
B) numeric/alphabetic check
C) range check
D) validity check

Question 40

The black box approach to testing computer program controls is also known as auditing around the computer.

Question 41

When analyzing the results of the test data method,the auditor would spend the least amount of time reviewing

A) the test transactions
B) error reports
C) updated master files
D) output reports

Question 42

Run-to-run control totals can be used for all of the following except

A) to ensure that all data input is validated
B) to ensure that only transactions of a similar type are being processed
C) to ensure the records are in sequence and are not missing
D) to ensure that no transaction is omitted

Question 43

Which input control check would detect a posting to the wrong customer account?

A) missing data check
B) check digit
C) reasonableness check
D) validity check

Question 44

Which of the following is an example of an input error correction technique?

A) immediate correction
B) rejection of batch
C) creation of error file
D) all are examples of input error correction techniques

Question 45

An inventory record indicates that 12 items of a specific product are on hand.A customer purchased two of the items,but when recording the order,the data entry clerk mistakenly entered 20 items sold.Which check could detect this error?

A) numeric/alphabetic data checks
B) limit check
C) range check
D) reasonableness check

Question 46

Which check is not an input control?

A) reasonableness check
B) validity check.
C) spooling check
D) missing data check

Question 47

When the auditor reconciles the program version numbers,which audit objective is being tested?

A) protect applications from unauthorized changes
B) ensure applications are free from error
C) protect production libraries from unauthorized access
D) ensure incompatible functions have been identified and segregated

Question 48

Which test of controls will provide evidence that the system as originally implemented was free from material errors and free from fraud? Review of the documentation indicates that

A) a cost-benefit analysis was conducted
B) the detailed design was an appropriate solution to the user's problem
C) tests were conducted at the individual module and total system levels prior to implementation
D) problems detected during the conversion period were corrected in the maintenance phase

Question 49

Input controls include all of the following except

A) check digits
B) Limit check.
C) spooling check
D) missing data check

Question 50

Which test is not an example of a white box test?

A) determining the fair value of inventory
B) ensuring that passwords are valid
C) verifying that all pay rates are within a specified range
D) reconciling control totals

Question 51

Which statement is not correct?

A) only successful transactions are recorded on a transaction log
B) unsuccessful transactions are recorded in an error file
C) a transaction log is a temporary file
D) a hardcopy transaction listing is provided to users

Question 52

When auditors do not rely on a detailed knowledge of the application's internal logic,they are performing

A) black box tests of program controls
B) white box tests of program controls
C) substantive testing
D) intuitive testing

Question 53

All of the following are disadvantages of the test data technique except

A) the test data technique requires extensive computer expertise on the part of the auditor
B) the auditor cannot be sure that the application being tested is a copy of the current application used by computer services personnel
C) the auditor cannot be sure that the application being tested is the same application used throughout the entire year
D) preparation of the test data is time-consuming

Question 54

All of the following are advantages of the test data technique except

A) auditors need minimal computer expertise to use this method
B) this method causes minimal disruption to the firm's operations
C) the test data is easily compiled
D) the auditor obtains explicit evidence concerning application functions

Question 55

The employee entered "40" in the "hours worked per day" field.Which check would detect this unintentional error?

A) numeric/alphabetic data check
B) sign check
C) limit check
D) missing data check

Question 56

All of the following concepts are associated with the black box approach to auditing computer applications except

A) the application need not be removed from service and tested directly
B) auditors do not rely on a detailed knowledge of the application's internal logic
C) the auditor reconciles previously produced output results with production input transactions
D) this approach is used for complex transactions that receive input from many sources

Question 57

Risk exposures associated with creating an output file as an intermediate step in the printing process (spooling)include all of the following actions by a computer criminal except

A) gaining access to the output file and changing critical data values
B) using a remote printer and incurring operating inefficiencies
C) making a copy of the output file and using the copy to produce illegal output reports
D) printing an extra hardcopy of the output file

Question 58

Which statement is not true?

A) An audit objective for systems maintenance is to detect unauthorized access to application databases.
B) An audit objective for systems maintenance is to ensure that applications are free from errors.
C) An audit objective for systems maintenance is to verify that user requests for maintenance reconcile to program version numbers.
D) An audit objective for systems maintenance is to ensure that the production libraries are protected from unauthorized access.

Question 59

Methods used to maintain an audit trail in a computerized environment include all of the following except

A) transaction logs
B) Transaction Listings.
C) data encryption
D) log of automatic transactions

Question 60

A computer operator was in a hurry and accidentally used the wrong master file to process a transaction file.As a result,the accounts receivable master file was erased.Which control would prevent this from happening?

A) header label check
B) expiration date check
C) version check
D) validity check

Question 61

Which statement is not true? Embedded audit modules

A) can be turned on and off by the auditor.
B) reduce operating efficiency.
C) may lose their viability in an environment where programs are modified frequently.
D) identify transactions to be analyzed using white box tests.

Question 62

What are the three broad categories of application controls?

Question 63

Which of the following is an input control?

A) Reasonableness check
B) Run-to-run check
C) Spooling check
D) Batch check
E) None are input controls

Question 64

Which of the following is not an input control?

A) Range check
B) Limit check
C) Spooling check
D) Validity check
E) They are all input controls

Question 65

Auditors do not rely on detailed knowledge of the application's internal logic when they use the __________________________ approach to auditing computer applications.

Question 66

What is an embedded audit module?

Question 67

Generalized audit software packages perform all of the following tasks except

A) recalculate data fields
B) compare files and identify differences
C) stratify statistical samples
D) analyze results and form opinions

Question 68

Contrast the source program library (SPL)management system to the database management system (DBMS).

Question 69

Describe two methods used to control the source program library.

Question 70

All of the following statements are true about the integrated test facility (ITF)except

A) production reports are affected by ITF transactions
B) ITF databases contain "dummy" records integrated with legitimate records
C) ITF permits ongoing application auditing
D) ITF does not disrupt operations or require the intervention of computer services personnel

Question 71

What is meant by auditing around the computer versus auditing through the computer? Why is this so important?

Question 72

Describe parallel simulation.

Question 73

What are the three categories of processing control?

Question 74

Output controls ensure that output is not lost,misdirected,or corrupted and that privacy is not violated.What are some output exposures or situations where output is at risk?

Question 75

How does privacy relate to output control?

Question 76

A __________________________ fraud affects a large number of victims but the harm to each appears to be very small.

Question 77

New system development activity controls must focus on the authorization,development,and implementation of new systems and its maintenance.Discuss at least five control activities that are found in an effective system development life cycle.

Question 78

Describe a test of controls that would provide evidence that only authorized program maintenance is occurring.

Question 79

Name four input controls and describe what they test

Question 80

What control issue is related to reentering corrected error records into a batch processing system? What are the two methods for doing this?