Question 1

Match between columns
                        Premises: Flowcharts logic of computer programs, develops and documents programs, and debugs programs.
Manages security of IT systems, including hardware, security software and monitors access to programs and data, and follows-up on security breaches.
Exercises overall control, develops short and long range plans, and approves systems.
Designs content and organization of the database and controls access to and use of the database.
Evaluates existing systems, designs new systems, outlines the systems, and prepares specifications for programmers.
Acts as liaison with user departments and monitors input, processing, and output.
Maintains custody of systems documentation, programs, and files.
Operates the computer hardware and executes the program according to operating instructions.

Accepted Answer

The Answer of IT manager and Systems analyst and Programmer is...

Question 2

In an audit of a small company, a narrative memorandum may serve as the only documentation of the auditor's understanding of internal controls.

Accepted Answer

A) True 
 B)False

Question 3

Distinguish between systems programs and application programs, and identify four types of systems programs.

Accepted Answer

Systems programs perform general functio

Question 4

Which one of the following is a key component of a decision table?

Accepted Answer

A)  conditions related to accounting transactions 
B)  actions taken by the computer operator 
C)  decision rules that are used to predict results of procedures 
D)  procedures executed by the computer program 
E)  functions completed by the accounting system 
A)  conditions related to accounting transactions 
B)  actions taken by the computer operator 
C)  decision rules that are used to predict results of procedures 
D)  procedures executed by the computer program 
E)  functions completed by the accounting system

Question 5

The risk of misstatement is associated with changes in the content or form of information.

Accepted Answer

A) True 
 B)False

Question 6

A before-and-after report shows a summary of the contents of a master file before and after each update.

Accepted Answer

A) True 
 B)False

Question 7

Utility programs contain instructions that enable the computer to perform specific data processing tasks for the user.

Accepted Answer

A) True 
 B)False

Question 8

An entity's internal controls consist of five interrelated components (plus an overriding concern with fraud prevention and detection):A:control environment
B:risk assessment
C:information and communication
D:control activities
E:monitoring
REQUIRED: Using the appropriate letter, identify the component to which each of the following control activities or considerations pertains.
1.Performance reviews
2.Commitment to competence
3.System should provide a complete audit or transaction trail
4.Integrity and ethical values
5.Access controls
6.Changes in operating environment
7.Board of directors and audit committee
8.Segregation of duties
9.Organizational structure
10.Reporting exceptions for follow-up
11.Management's philosophy and operating style
12.Internal audit function
13.Physical controls
14.New accounting pronouncements
15.Assignment of authority and responsibility
16.Human resource policies and procedures
17.Organization and operation control
18.Input controls
19.Data and procedural controls
20.Processing controls

Accepted Answer

1. D 5. D 9. A 13. D 17. D
2.

Question 9

The auditor's consideration of internal controls relates primarily to nonfinancial objectives.

Accepted Answer

A) True 
 B)False

Question 10

A company's accounting system should provide a complete "chain of evidence" for every major transaction.

Accepted Answer

A) True 
 B)False

Question 11

The grandfather-father-son concept is an example of a(n):

Accepted Answer

A)  systems development and documentation control. 
B)  hardware and systems software control. 
C)  access control. 
D)  data and procedural control. 
E)  general control. 
A)  systems development and documentation control. 
B)  hardware and systems software control. 
C)  access control. 
D)  data and procedural control. 
E)  general control.

Question 12

Internal auditors have primary responsibility for establishing and maintaining internal controls.

Accepted Answer

A) True 
 B)False

Question 13

The database method of data organization is the main alternative to the traditional file method.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a hardware and systems software control?

Accepted Answer

A)  echo check 
B)  read after write 
C)  data dictionary/directory 
D)  dual read 
E)  parity check 
A)  echo check 
B)  read after write 
C)  data dictionary/directory 
D)  dual read 
E)  parity check

Question 15

To enhance controls, it is normally desirable to have a single employee handle a transaction from beginning to end.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a widely used data processing method?

Accepted Answer

A)  batch entry/on-line processing 
B)  off-line entry/batch processing 
C)  off-line entry/on-line processing 
D)  off-line entry/off-line processing 
E)  on-line entry/batch processing 
A)  batch entry/on-line processing 
B)  off-line entry/batch processing 
C)  off-line entry/on-line processing 
D)  off-line entry/off-line processing 
E)  on-line entry/batch processing

Question 17

List the fundamental concepts that are embodied in the definition of internal control as per the COSO report.

Accepted Answer

1.Internal control is a process that is

Question 18

It is management's responsibility to establish and maintain effective internal controls.

Accepted Answer

A) True 
 B)False

Question 19

Management's risk assessment for financial reporting purposes is similar to the internal auditor's concern with inherent risks.

Accepted Answer

A) True 
 B)False

Question 20

Monitoring is a process that assesses the quality of the internal controls performance over time.

Accepted Answer

A) True 
 B)False

In an audit of a small company, a narrative memorandum may serve as the only documentation of the auditor's understanding of internal controls.

Distinguish between systems programs and application programs, and identify four types of systems programs.

Which one of the following is a key component of a decision table?

The risk of misstatement is associated with changes in the content or form of information.

A before-and-after report shows a summary of the contents of a master file before and after each update.

Utility programs contain instructions that enable the computer to perform specific data processing tasks for the user.

The auditor's consideration of internal controls relates primarily to nonfinancial objectives.

A company's accounting system should provide a complete "chain of evidence" for every major transaction.

The grandfather-father-son concept is an example of a(n):

Internal auditors have primary responsibility for establishing and maintaining internal controls.

The database method of data organization is the main alternative to the traditional file method.

Which of the following is not a hardware and systems software control?

To enhance controls, it is normally desirable to have a single employee handle a transaction from beginning to end.

Which of the following is a widely used data processing method?

List the fundamental concepts that are embodied in the definition of internal control as per the COSO report.

It is management's responsibility to establish and maintain effective internal controls.

Management's risk assessment for financial reporting purposes is similar to the internal auditor's concern with inherent risks.

Monitoring is a process that assesses the quality of the internal controls performance over time.

Auditing and the Public Accounting

Financial Statement Audits and

Professional Ethics

Auditors Legal Liability

Overview of the Audit Process

Audit Evidence, Audit Objectives,

Accepting the Engagement and

Materiality Decisions and Performing Analytical Procedures

Audit Risk, Including the Risk of Fraud

Audit Procedures in Response to Assessed Risks: Tests of Controls

Audit Procedures in Response to Assessed Risks: Substantive Tests

Audit Sampling in Substantive Tests

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Auditing the Production and

Auditing the Investing and

Auditing Investments and

Completing the Audit and Postaudit

Attest and Assurance Services, and Related Reports

Internal, Operational, and

Filters

Exam 10: Understanding Internal Controls

In an audit of a small company, a narrative memorandum may serve as the only documentation of the auditor's understanding of internal controls.

Distinguish between systems programs and application programs, and identify four types of systems programs.

Which one of the following is a key component of a decision table?

The risk of misstatement is associated with changes in the content or form of information.

A before-and-after report shows a summary of the contents of a master file before and after each update.

Utility programs contain instructions that enable the computer to perform specific data processing tasks for the user.

The auditor's consideration of internal controls relates primarily to nonfinancial objectives.

A company's accounting system should provide a complete "chain of evidence" for every major transaction.

The grandfather-father-son concept is an example of a(n):

Internal auditors have primary responsibility for establishing and maintaining internal controls.

The database method of data organization is the main alternative to the traditional file method.

Which of the following is not a hardware and systems software control?

To enhance controls, it is normally desirable to have a single employee handle a transaction from beginning to end.

Which of the following is a widely used data processing method?

List the fundamental concepts that are embodied in the definition of internal control as per the COSO report.

It is management's responsibility to establish and maintain effective internal controls.

Management's risk assessment for financial reporting purposes is similar to the internal auditor's concern with inherent risks.

Monitoring is a process that assesses the quality of the internal controls performance over time.

Auditing and the Public Accounting

Financial Statement Audits and

Professional Ethics

Auditors Legal Liability

Overview of the Audit Process

Audit Evidence, Audit Objectives,

Accepting the Engagement and

Materiality Decisions and Performing Analytical Procedures

Audit Risk, Including the Risk of Fraud

Audit Procedures in Response to Assessed Risks: Tests of Controls

Audit Procedures in Response to Assessed Risks: Substantive Tests

Audit Sampling in Substantive Tests

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Auditing the Production and

Auditing the Investing and

Auditing Investments and

Completing the Audit and Postaudit

Attest and Assurance Services, and Related Reports

Internal, Operational, and

Filters