When using test data,why are audit teams required to prepare only one transaction to test each computer processing alternative?
A) The speed and efficiency of the computer results in reduced sample sizes.
B) The risk of misstatement is typically lower in a computerized processing environment.
C) Audit teams generally perform more extensive substantive testing in a computerized processing environment, resulting in less need to test processing controls.
D) In a computerized processing environment, each transaction is handled in an identical manner.

Question

Quizplus · Accepted Answer

In a computerized processing environment, each transaction is handled in an identical manner, which means that testing one transaction is sufficient to test the processing controls. This is because the computerized system is programmed to perform the same operation for each transaction of the same type. Therefore, auditing one transaction should provide sufficient evidence of the effectiveness of the processing controls for that type of transaction. This approach allows audit teams to focus on other areas where there may be a higher risk of misstatement.

When Using Test Data,why Are Audit Teams Required to Prepare