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

Controls that relate to a specific use of the IT system, such as the processing of sales or cash receipts, are called application controls.

A site is allowed to retain the Webtrust seal if the auditor monitors compliance at least every:

Which one of the following statements is incorrect about network environments?

Provide five examples of different IT environments the auditor may encounter.

General controls in smaller companies are usually less effective than in more complex IT environments.

In database management systems, each application contains its own data file whereas in non- database environments, many applications share files.

A key to successful software purchase decisions involves:

General controls are normally evaluated earlier in the audit than application controls.

The auditor can perform many different kinds of tests and other functions with the auditor's computer program. Which of the following tests or functions CANNOT be performed?

A firewall is a system of hardware and software that monitors and controls the flow of e- commerce communications by channelling all network connections through a control gateway.

The focus of output controls is to:

Auditing standards describe which two broad control groupings for IT systems? 1. General controls 2) Application controls 3) Information controls 4) Performance controls

If the general control environment is weak:

Companies decide whether to outsource IT based on auditor judgement.

A computer service centre processes, for an auditor's client, financial data that has a material effect on that client's financial statements. The independent auditor need NOT consider a review of the service centre controls if:

Auditing through the computer is justified when general controls are acceptable.

Auditing around the computer is acceptable if the auditor has access to sufficient source documents and a detailed listing of output in a readable form.

Generalised audit software:

Well- controlled organisations segregate key duties within IT. Ideally, this means the following responsibilities should be separated:

In IT systems, if general controls are effective, it increases the auditor's ability to rely on application controls to reduce control risk.