Question 1

Controls specific to IT include all of the following except for:

Accepted Answer

A)  adequately designed input screens. 
B)  pull-down menu lists. 
C)  validation tests of input accuracy. 
D)  separation of duties. 
A)  adequately designed input screens. 
B)  pull-down menu lists. 
C)  validation tests of input accuracy. 
D)  separation of duties.

Question 2

Old and new systems operating simultaneously in all locations is a test approach known as:

Accepted Answer

A)  pilot testing. 
B)  horizontal testing. 
C)  integrative testing. 
D)  parallel testing. 
A)  pilot testing. 
B)  horizontal testing. 
C)  integrative testing. 
D)  parallel testing.

Question 3

Controls which are built in by the manufacturer to detect equipment failure are called:

Accepted Answer

A)  input controls. 
B)  data integrity controls. 
C)  hardware controls. 
D)  manufacturer's controls. 
A)  input controls. 
B)  data integrity controls. 
C)  hardware controls. 
D)  manufacturer's controls.

Question 4

A service center:

Accepted Answer

A)  must have an auditor hired by the PCAOB test the controls of the service center. 
B)  audit cannot be relied upon by those outside of the firm. 
C)  can engage a CPA firm to issue a report on their internal controls for use by all customers and their independent auditors. 
D)  must make all of their systems available to any external party. 
A)  must have an auditor hired by the PCAOB test the controls of the service center. 
B)  audit cannot be relied upon by those outside of the firm. 
C)  can engage a CPA firm to issue a report on their internal controls for use by all customers and their independent auditors. 
D)  must make all of their systems available to any external party.

Question 5

Describe three computer auditing techniques available to the auditor.

Accepted Answer

Computer auditing techniques available t

Question 6

Which of the following tests determines that every field in a record has been completed?

Accepted Answer

A)  Validation 
B)  Sequence 
C)  Completeness 
D)  Programming 
A)  Validation 
B)  Sequence 
C)  Completeness 
D)  Programming

Question 7

Which of the following computer-assisted auditing techniques inserts an audit module in the client's application system to identify specific types of transactions?

Accepted Answer

A)  Parallel simulation testing 
B)  Test data approach 
C)  Embedded audit module 
D)  Generalized audit software testing 
A)  Parallel simulation testing 
B)  Test data approach 
C)  Embedded audit module 
D)  Generalized audit software testing

Question 8

What do auditing standards require when a company outsources some of their IT requirements to an independent computer service center?

Accepted Answer

Auditing standards require the auditor t

Question 9

Which of the following best describes the test data approach?

Accepted Answer

A)  Auditors process their own test data using the client's computer system and application program. 
B)  Auditors process their own test data using their own computers that simulate the client's computer system. 
C)  Auditors use auditor-controlled software to do the same operations that the client's software does, using the same data files. 
D)  Auditors use client-controlled software to do the same operations that the client's software does, using auditor created data files. 
A)  Auditors process their own test data using the client's computer system and application program. 
B)  Auditors process their own test data using their own computers that simulate the client's computer system. 
C)  Auditors use auditor-controlled software to do the same operations that the client's software does, using the same data files. 
D)  Auditors use client-controlled software to do the same operations that the client's software does, using auditor created data files.

Question 10

If a control total were to be computed on each of the following data items,which would best be identified as a hash total for a payroll IT application?

Accepted Answer

A)  Gross wages earned 
B)  Employee numbers 
C)  Total hours worked 
D)  Total debit amounts and total credit amounts 
A)  Gross wages earned 
B)  Employee numbers 
C)  Total hours worked 
D)  Total debit amounts and total credit amounts

Question 11

Generalized audit software is used to test automated controls.

Accepted Answer

A) True 
 B)False

Question 12

Since IT systems can often initiate transactions automatically,proper authorization depends on software procedures and accurate master files used to make the authorization decision.

Accepted Answer

A) True 
 B)False

Question 13

Auditors often use their own software to test the client's IT controls.

Accepted Answer

A) True 
 B)False

Question 14

What are three specific risks to IT systems?

Accepted Answer

The three specific risks to IT

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a component of general controls?

Accepted Answer

A)  Processing controls 
B)  Output controls 
C)  Back-up and contingency planning 
D)  Input controls 
A)  Processing controls 
B)  Output controls 
C)  Back-up and contingency planning 
D)  Input controls

Question 17

Programmers should only be allowed to work with test copies of programs and data.

Accepted Answer

A) True 
 B)False

Question 18

Output controls focus on preventing errors during processing.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a general control?

Accepted Answer

A)  Separation of IT duties 
B)  Systems development 
C)  Processing controls 
D)  Hardware controls 
A)  Separation of IT duties 
B)  Systems development 
C)  Processing controls 
D)  Hardware controls

Question 20

Knowledge of both general and application controls is crucial for auditors in understanding how accounting information is recorded and reported.

Accepted Answer

A) True 
 B)False

Exam 12: Implications of Information Technology for the Audit Process

Controls specific to IT include all of the following except for:

Old and new systems operating simultaneously in all locations is a test approach known as:

Controls which are built in by the manufacturer to detect equipment failure are called:

A service center:

Describe three computer auditing techniques available to the auditor.

Which of the following tests determines that every field in a record has been completed?

Which of the following computer-assisted auditing techniques inserts an audit module in the client's application system to identify specific types of transactions?

What do auditing standards require when a company outsources some of their IT requirements to an independent computer service center?

Which of the following best describes the test data approach?

If a control total were to be computed on each of the following data items,which would best be identified as a hash total for a payroll IT application?

Generalized audit software is used to test automated controls.

Since IT systems can often initiate transactions automatically,proper authorization depends on software procedures and accurate master files used to make the authorization decision.

Auditors often use their own software to test the client's IT controls.

What are three specific risks to IT systems?

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

Which of the following is a component of general controls?

Programmers should only be allowed to work with test copies of programs and data.

Output controls focus on preventing errors during processing.

Which of the following is not a general control?

Knowledge of both general and application controls is crucial for auditors in understanding how accounting information is recorded and reported.

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Developing the Overall Audit Plan and Audit Program

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

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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