Question 1

A database management system:

Accepted Answer

A)  allows quick retrieval of data, but it needs to update files continually. 
B)  reduces data redundancy. 
C)  allows quick retrieval of data but at a cost of inefficient use of file space. 
D)  stores data on different files for different purposes, but always knows where they are and how to retrieve them. 
A)  allows quick retrieval of data, but it needs to update files continually. 
B)  reduces data redundancy. 
C)  allows quick retrieval of data but at a cost of inefficient use of file space. 
D)  stores data on different files for different purposes, but always knows where they are and how to retrieve them.

Question 2

Auditors usually evaluate the effectiveness of:

Accepted Answer

A)  applications controls first. 
B)  sales- cycle controls first. 
C)  general controls before applications controls. 
D)  hardware controls first. 
A)  applications controls first. 
B)  sales- cycle controls first. 
C)  general controls before applications controls. 
D)  hardware controls first.

Question 3

The perceived importance of IT within an organisation is often dictated by the attitude of the audit committee.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an enhancement to internal control resulting from integrating IT into accounting systems?

Accepted Answer

A)  Computer controls replace manual ones 
B)  Higher quality information 
C)  Both A and B 
D)  Neither A nor B 
A)  Computer controls replace manual ones 
B)  Higher quality information 
C)  Both A and B 
D)  Neither A nor B

Question 5

The audit approach in which the auditor runs his or her own program on a controlled basis in order to verify the client's data recorded in a machine language is:

Accepted Answer

A)  the microcomputer- aided auditing approach. 
B)  the generalised audit software approach. 
C)  the test data approach. 
D)  called auditing around the computer. 
A)  the microcomputer- aided auditing approach. 
B)  the generalised audit software approach. 
C)  the test data approach. 
D)  called auditing around the computer.

Question 6

The accumulation of source documents and records that allows the organisation to trace accounting entries back to their initiation is the:

Accepted Answer

A)  substantiation record. 
B)  initialisation procedure. 
C)  outsourcing code. 
D)  audit trail. 
A)  substantiation record. 
B)  initialisation procedure. 
C)  outsourcing code. 
D)  audit trail.

Question 7

Describe four common audit tasks that can be simplified by the use of microcomputers in practice.

Accepted Answer

Common audit tasks that can be simplifie

Question 8

Many clients have their data processed at an independent computer service centre (IT outsourcing). The difficulty the independent auditor faces when a computer service centre is used is:

Accepted Answer

A)  in trying to abide by the joint Code of Professional Conduct to maintain the security and confidentiality of the client's data. 
B)  in determining the adequacy of the service centre's internal controls. 
C)  finding compatible programs that will analyse the service centre's programs. 
D)  gaining the permission of the service centre to review its work. 
A)  in trying to abide by the joint Code of Professional Conduct to maintain the security and confidentiality of the client's data. 
B)  in determining the adequacy of the service centre's internal controls. 
C)  finding compatible programs that will analyse the service centre's programs. 
D)  gaining the permission of the service centre to review its work.

Question 9

Program- oriented CAATs:

Accepted Answer

A)  allow the auditor to select records for further testing. 
B)  may be applied regardless of the level of assessed control risk in an application. 
C)  are useful primarily for substantive procedures. 
D)  none of the above 
A)  allow the auditor to select records for further testing. 
B)  may be applied regardless of the level of assessed control risk in an application. 
C)  are useful primarily for substantive procedures. 
D)  none of the above

Question 10

Auditing around the computer:

Accepted Answer

A)  uses computer programs to perform audit tasks in special circumstances. 
B)  uses the client's computer as an audit tool. 
C)  only considers the non- IT controls in assessing control risk. 
D)  all of the above 
A)  uses computer programs to perform audit tasks in special circumstances. 
B)  uses the client's computer as an audit tool. 
C)  only considers the non- IT controls in assessing control risk. 
D)  all of the above

Question 11

Tests of controls are normally performed only if the auditor believes the client's internal control may be effective.

Accepted Answer

A) True 
 B)False

Question 12

IT can significantly impact on an organisation's overall control risk. Which of the following risks would NOT be important from an auditing perspective?

Accepted Answer

A)  Use of unreliable information because of processing errors produced by the technology 
B)  The inability to retrieve important information because of IT systems failure 
C)  The potential for material misstatement 
D)  None of the above, i.e., they are all important. 
A)  Use of unreliable information because of processing errors produced by the technology 
B)  The inability to retrieve important information because of IT systems failure 
C)  The potential for material misstatement 
D)  None of the above, i.e., they are all important.

Question 13

Describe the method used to reduce unauthorised exposures by external parties in e- commerce systems.

Accepted Answer

The use of e- commerce systems exposes c

Question 14

The effect of ITF transactions should be removed:

Accepted Answer

A)  on a surprise basis. 
B)  after the conclusion of the audit. 
C)  by inputting adjustment transactions. 
D)  by the internal audit group. 
A)  on a surprise basis. 
B)  after the conclusion of the audit. 
C)  by inputting adjustment transactions. 
D)  by the internal audit group.

Question 15

Data Corporation has just completely computerised its billing and accounts receivable record- keeping. Your firm has recently acquired IDEA software and you want to make maximum use of the computer in your audit of Data Corporation. Which of the following audit techniques could NOT be performed using generalised audit software?

Accepted Answer

A)  Selecting a sample of accounts to be confirmed and printing confirmation requests 
B)  Comparing data on separate files 
C)  Resolving differences reported by customers on confirmation requests 
D)  Examining records for quality, completeness, consistency and correctness 
A)  Selecting a sample of accounts to be confirmed and printing confirmation requests 
B)  Comparing data on separate files 
C)  Resolving differences reported by customers on confirmation requests 
D)  Examining records for quality, completeness, consistency and correctness

Question 16

Discuss how the integration of IT into accounting systems enhances internal control.

Accepted Answer

Enhancements to internal control resulti

Question 17

To obtain evidence that all external users in an e- commerce system are authorised, a 'firewall' channels all network connections through a:

Accepted Answer

A)  separate computer service bureau. 
B)  control gateway. 
C)  single telephone line. 
D)  single computer monitor. 
A)  separate computer service bureau. 
B)  control gateway. 
C)  single telephone line. 
D)  single computer monitor.

Question 18

Program- oriented CAATs are useful primarily for:

Accepted Answer

A)  tests of controls. 
B)  any type of audit testing. 
C)  tests of balances. 
D)  analytical review tests. 
A)  tests of controls. 
B)  any type of audit testing. 
C)  tests of balances. 
D)  analytical review tests.

Question 19

Processing controls is a category of general controls.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following is NOT an application control?

Accepted Answer

A)  Input controls 
B)  Output controls 
C)  Processing controls 
D)  Hardware controls 
A)  Input controls 
B)  Output controls 
C)  Processing controls 
D)  Hardware controls

A database management system:

Auditors usually evaluate the effectiveness of:

The perceived importance of IT within an organisation is often dictated by the attitude of the audit committee.

Which of the following is an enhancement to internal control resulting from integrating IT into accounting systems?

The audit approach in which the auditor runs his or her own program on a controlled basis in order to verify the client's data recorded in a machine language is:

The accumulation of source documents and records that allows the organisation to trace accounting entries back to their initiation is the:

Describe four common audit tasks that can be simplified by the use of microcomputers in practice.

Many clients have their data processed at an independent computer service centre (IT outsourcing). The difficulty the independent auditor faces when a computer service centre is used is:

Program- oriented CAATs:

Auditing around the computer:

Tests of controls are normally performed only if the auditor believes the client's internal control may be effective.

IT can significantly impact on an organisation's overall control risk. Which of the following risks would NOT be important from an auditing perspective?

Describe the method used to reduce unauthorised exposures by external parties in e- commerce systems.

The effect of ITF transactions should be removed:

Discuss how the integration of IT into accounting systems enhances internal control.

To obtain evidence that all external users in an e- commerce system are authorised, a 'firewall' channels all network connections through a:

Program- oriented CAATs are useful primarily for:

Processing controls is a category of general controls.

Which one of the following is NOT an application control?

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters

Exam 10: The Impact of Information Technology on the Audit Process

A database management system:

Auditors usually evaluate the effectiveness of:

The perceived importance of IT within an organisation is often dictated by the attitude of the audit committee.

Which of the following is an enhancement to internal control resulting from integrating IT into accounting systems?

The audit approach in which the auditor runs his or her own program on a controlled basis in order to verify the client's data recorded in a machine language is:

The accumulation of source documents and records that allows the organisation to trace accounting entries back to their initiation is the:

Describe four common audit tasks that can be simplified by the use of microcomputers in practice.

Many clients have their data processed at an independent computer service centre (IT outsourcing). The difficulty the independent auditor faces when a computer service centre is used is:

Program- oriented CAATs:

Auditing around the computer:

Tests of controls are normally performed only if the auditor believes the client's internal control may be effective.

IT can significantly impact on an organisation's overall control risk. Which of the following risks would NOT be important from an auditing perspective?

Describe the method used to reduce unauthorised exposures by external parties in e- commerce systems.

The effect of ITF transactions should be removed:

Discuss how the integration of IT into accounting systems enhances internal control.

To obtain evidence that all external users in an e- commerce system are authorised, a 'firewall' channels all network connections through a:

Program- oriented CAATs are useful primarily for:

Processing controls is a category of general controls.

Which one of the following is NOT an application control?

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters