Question 1

Which of the following best describes what is meant by the term "generally accepted auditing standards"?

Accepted Answer

A) Procedures used to gather evidence to support the accuracy of a client's financial statements 
B) Measures of the quality of an auditor's conduct carrying out professional responsibilities 
C) Professional pronouncements issued by the Auditing Standards Board 
D) Rules acknowledged by the accounting profession because of their widespread application 
A) Procedures used to gather evidence to support the accuracy of a client's financial statements 
B) Measures of the quality of an auditor's conduct carrying out professional responsibilities 
C) Professional pronouncements issued by the Auditing Standards Board 
D) Rules acknowledged by the accounting profession because of their widespread application

Question 2

This organization, established by the Sarbanes-Oxley Act, was organized in 2003 for the purpose of establishing auditing standards for public companies.

Accepted Answer

A) Auditing Standards Board 
B) Public Company Accounting Oversight Board 
C) International Audit Practices Committee 
D) Information Systems Audit and Control Association 
A) Auditing Standards Board 
B) Public Company Accounting Oversight Board 
C) International Audit Practices Committee 
D) Information Systems Audit and Control Association

Question 3

The likelihood that errors or fraud may occur is referred to as:

Accepted Answer

A) Risk 
B) Materiality 
C) Control tests 
D) Sampling 
A) Risk 
B) Materiality 
C) Control tests 
D) Sampling

Question 4

This type of auditor specializes in the information systems assurance, control, and security.They may work for CPA firms, government agencies, or with the internal audit group.

Accepted Answer

A) IT auditor 
B) Government auditor 
C) Certified Public Accountant 
D) Internal auditor 
A) IT auditor 
B) Government auditor 
C) Certified Public Accountant 
D) Internal auditor

Question 5

This is one of the computer-assisted audit techniques, related to processing controls, that involves processing company data through a controlled program designed to resemble the company's application.This test is run to find out whether the same results are achieved under different systems.

Accepted Answer

A) Integrated test facility 
B) Embedded audit module 
C) Parallel simulation 
D) Test data method 
A) Integrated test facility 
B) Embedded audit module 
C) Parallel simulation 
D) Test data method

Question 6

This type of auditor is an employee of the company he/she audits.

Accepted Answer

A) IT auditor 
B) Government auditor 
C) Certified Public Accountant 
D) Internal auditor 
A) IT auditor 
B) Government auditor 
C) Certified Public Accountant 
D) Internal auditor

Question 7

The automated controls that affect all computer applications are referred to as:

Accepted Answer

A) General controls 
B) Specific controls 
C) Input controls 
D) Application controls 
A) General controls 
B) Specific controls 
C) Input controls 
D) Application controls

Question 8

Financial statement audits are required to be performed by:

Accepted Answer

A) Governmental auditors 
B) CPAs 
C) Internal auditors 
D) IT auditors 
A) Governmental auditors 
B) CPAs 
C) Internal auditors 
D) IT auditors

Question 9

This organization is part of the AICPA and was the group responsible for issuing statements on auditing standards which were historically widely used in practice.

Accepted Answer

A) Auditing Standards Board 
B) Public Company Accounting Oversight Board 
C) International Audit Practices Committee 
D) Information Systems Audit and Control Association 
A) Auditing Standards Board 
B) Public Company Accounting Oversight Board 
C) International Audit Practices Committee 
D) Information Systems Audit and Control Association

Question 10

This type of audit is completed to assess the operating policies and procedures of a client for efficiency and effectiveness.

Accepted Answer

A) Efficiency audit 
B) Effectiveness audit 
C) Compliance audit 
D) Operational audit 
A) Efficiency audit 
B) Effectiveness audit 
C) Compliance audit 
D) Operational audit

Question 11

This approach, referred to as the white box approach, requires auditors to evaluate IT controls and processing so that they can determine whether the information generated from the system is reliable.

Accepted Answer

A) Auditing through the system 
B) Auditing around the system 
C) Computer assisted audit techniques 
D) Auditing with the computer 
A) Auditing through the system 
B) Auditing around the system 
C) Computer assisted audit techniques 
D) Auditing with the computer

Question 12

IT auditors may need to be called in to:

Accepted Answer

A) Consider the effects of computer processing on the audit 
B) To assist in testing the automated processes 
C) Both of the above 
D) Neither of the above 
A) Consider the effects of computer processing on the audit 
B) To assist in testing the automated processes 
C) Both of the above 
D) Neither of the above

Question 13

The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.This is one of the generally accepted auditing standards that is part of the:

Accepted Answer

A) General Standards 
B) Operating Standards 
C) Fieldwork Standards 
D) Reporting Standards 
A) General Standards 
B) Operating Standards 
C) Fieldwork Standards 
D) Reporting Standards

Question 14

In an audit of financial statement in accordance with generally accepted auditing standards, an auditor is required to:

Accepted Answer

A) Document the auditor's understanding of the client company's internal controls 
B) Search for weaknesses in the operation of the client company's internal controls 
C) Perform tests of controls to evaluate the effectiveness of the client company's internal controls 
D) Determine whether controls are appropriately operating to prevent or detect material misstatements 
A) Document the auditor's understanding of the client company's internal controls 
B) Search for weaknesses in the operation of the client company's internal controls 
C) Perform tests of controls to evaluate the effectiveness of the client company's internal controls 
D) Determine whether controls are appropriately operating to prevent or detect material misstatements

Question 15

The role of the auditors is to analyze the underlying facts to decide whether information provided by management is fairly presented.Auditors design ____1_____ to analyze information in order to determine whether ____2_____ is/are valid.

Accepted Answer

A) 1=audit objectives; 2=management's assertions 
B) 1=audit tests; 2=audit objectives 
C) 1=audit tests; 2=audit evidence 
D) 1=audit tests; 2=management's assertions 
A) 1=audit objectives; 2=management's assertions 
B) 1=audit tests; 2=audit objectives 
C) 1=audit tests; 2=audit evidence 
D) 1=audit tests; 2=management's assertions

Question 16

This phase of auditing occurs when the auditors evaluate all the evidence that has been accumulated and makes a conclusion based on that evidence.

Accepted Answer

A) Tests of controls 
B) Audit planning 
C) Audit completion / reporting 
D) Substantive testing 
A) Tests of controls 
B) Audit planning 
C) Audit completion / reporting 
D) Substantive testing

Question 17

Many companies design their IT systems so that all documents and reports can be retrieved from the system in readable form.Auditors can then compare the documents used to input the data into the system with reports generated from the system, without needing any extensive knowledge of the computer system or evaluation of computer controls.This process is referred to as:

Accepted Answer

A) Auditing through the system 
B) Auditing around the system 
C) Computer-assisted audit techniques 
D) Auditing with the computer 
A) Auditing through the system 
B) Auditing around the system 
C) Computer-assisted audit techniques 
D) Auditing with the computer

Question 18

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

Accepted Answer

A) Risk 
B) Materiality 
C) Substantive 
D) Sampling 
A) Risk 
B) Materiality 
C) Substantive 
D) Sampling

Question 19

These tests of security controls analyze a company's control environment for possible weaknesses.Special software programs are available to help auditors identify weak points in a company's security measures.

Accepted Answer

A) Authenticity tests 
B) Penetration tests 
C) Vulnerability assessments 
D) IT systems documentation 
A) Authenticity tests 
B) Penetration tests 
C) Vulnerability assessments 
D) IT systems documentation

Question 20

Independence in mental attitude is to be maintained in all matters related to the audit engagement.This is one of the generally accepted auditing standards that is part of the:

Accepted Answer

A) General Standards 
B) Operating Standards 
C) Fieldwork Standards 
D) Reporting Standards 
A) General Standards 
B) Operating Standards 
C) Fieldwork Standards 
D) Reporting Standards

Which of the following best describes what is meant by the term "generally accepted auditing standards"?

This organization, established by the Sarbanes-Oxley Act, was organized in 2003 for the purpose of establishing auditing standards for public companies.

The likelihood that errors or fraud may occur is referred to as:

This type of auditor specializes in the information systems assurance, control, and security.They may work for CPA firms, government agencies, or with the internal audit group.

This is one of the computer-assisted audit techniques, related to processing controls, that involves processing company data through a controlled program designed to resemble the company's application.This test is run to find out whether the same results are achieved under different systems.

This type of auditor is an employee of the company he/she audits.

The automated controls that affect all computer applications are referred to as:

Financial statement audits are required to be performed by:

This organization is part of the AICPA and was the group responsible for issuing statements on auditing standards which were historically widely used in practice.

This type of audit is completed to assess the operating policies and procedures of a client for efficiency and effectiveness.

This approach, referred to as the white box approach, requires auditors to evaluate IT controls and processing so that they can determine whether the information generated from the system is reliable.

IT auditors may need to be called in to:

The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.This is one of the generally accepted auditing standards that is part of the:

In an audit of financial statement in accordance with generally accepted auditing standards, an auditor is required to:

The role of the auditors is to analyze the underlying facts to decide whether information provided by management is fairly presented.Auditors design __1_ to analyze information in order to determine whether 2___ is/are valid.

This phase of auditing occurs when the auditors evaluate all the evidence that has been accumulated and makes a conclusion based on that evidence.

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

These tests of security controls analyze a company's control environment for possible weaknesses.Special software programs are available to help auditors identify weak points in a company's security measures.

Independence in mental attitude is to be maintained in all matters related to the audit engagement.This is one of the generally accepted auditing standards that is part of the:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspurchases

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters

Exam 7: Auditing Information Technology-Based Processes

Which of the following best describes what is meant by the term "generally accepted auditing standards"?

This organization, established by the Sarbanes-Oxley Act, was organized in 2003 for the purpose of establishing auditing standards for public companies.

The likelihood that errors or fraud may occur is referred to as:

This type of auditor specializes in the information systems assurance, control, and security.They may work for CPA firms, government agencies, or with the internal audit group.

This is one of the computer-assisted audit techniques, related to processing controls, that involves processing company data through a controlled program designed to resemble the company's application.This test is run to find out whether the same results are achieved under different systems.

This type of auditor is an employee of the company he/she audits.

The automated controls that affect all computer applications are referred to as:

Financial statement audits are required to be performed by:

This organization is part of the AICPA and was the group responsible for issuing statements on auditing standards which were historically widely used in practice.

This type of audit is completed to assess the operating policies and procedures of a client for efficiency and effectiveness.

This approach, referred to as the white box approach, requires auditors to evaluate IT controls and processing so that they can determine whether the information generated from the system is reliable.

IT auditors may need to be called in to:

The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.This is one of the generally accepted auditing standards that is part of the:

In an audit of financial statement in accordance with generally accepted auditing standards, an auditor is required to:

The role of the auditors is to analyze the underlying facts to decide whether information provided by management is fairly presented.Auditors design ____1_____ to analyze information in order to determine whether ____2_____ is/are valid.

This phase of auditing occurs when the auditors evaluate all the evidence that has been accumulated and makes a conclusion based on that evidence.

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

These tests of security controls analyze a company's control environment for possible weaknesses.Special software programs are available to help auditors identify weak points in a company's security measures.

Independence in mental attitude is to be maintained in all matters related to the audit engagement.This is one of the generally accepted auditing standards that is part of the:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspurchases

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters

The role of the auditors is to analyze the underlying facts to decide whether information provided by management is fairly presented.Auditors design __1_ to analyze information in order to determine whether 2___ is/are valid.