Question 1

A numerical field appended to an identification number that serves as an input control is a(n)

Accepted Answer

A)  Batch total. 
B)  Hash total. 
C)  Check digit. 
D)  Valid character test. 
A)  Batch total. 
B)  Hash total. 
C)  Check digit. 
D)  Valid character test.

Question 2

The purpose of test data is to determine whether

Accepted Answer

A)  The audit team's test data are consistent with the client's normal transactions. 
B)  Controls operate as described in responses to internal control questionnaire items and program flowcharts. 
C)  Every possible error is prevented or detected by the client's computer controls. 
D)  All possible combinations of valid data are correctly processed. 
A)  The audit team's test data are consistent with the client's normal transactions. 
B)  Controls operate as described in responses to internal control questionnaire items and program flowcharts. 
C)  Every possible error is prevented or detected by the client's computer controls. 
D)  All possible combinations of valid data are correctly processed.

Question 3

Computer operations controls are typically implemented for files and data used in processing.The major objectives of these controls include each of the following except

Accepted Answer

A)  Ensure that appropriate files are used in computerized processing. 
B)  Ensure restricted access to the computing environment. 
C)  Ensure that files are appropriately secured and protected from loss. 
D)  Ensure that files can be reconstructed from earlier versions of information used in processing. 
A)  Ensure that appropriate files are used in computerized processing. 
B)  Ensure restricted access to the computing environment. 
C)  Ensure that files are appropriately secured and protected from loss. 
D)  Ensure that files can be reconstructed from earlier versions of information used in processing.

Question 4

The use of the systems development life cycle is an example of an access to programs and data control.

Accepted Answer

A) True 
 B)False

Question 5

Audit teams can use the computer to test the operating effectiveness of the client's controls in each of the following cases except to

Accepted Answer

A)  Select transactions and manually audit the actual transaction processing. 
B)  Evaluate the computer controls using simulated data. 
C)  Compare external documentation with internal documentation. 
D)  Evaluate the computer controls using actual data processed through the client's computer programs. 
A)  Select transactions and manually audit the actual transaction processing. 
B)  Evaluate the computer controls using simulated data. 
C)  Compare external documentation with internal documentation. 
D)  Evaluate the computer controls using actual data processed through the client's computer programs.

Question 6

Computer controls that are pervasive and apply to all applications of a computerized processing system are referred to as

Accepted Answer

A)  Computer controls. 
B)  Environment controls. 
C)  Automated application controls. 
D)  General controls. 
A)  Computer controls. 
B)  Environment controls. 
C)  Automated application controls. 
D)  General controls.

Question 7

At a meeting of the corporate audit committee attended by the general manager of the products division (A.Smith)and the internal audit manager (P.Marks),the following dialogue took place between Smith and R.Jones (chair of the corporate audit committee):
Jones: Ms.Marks has suggested that the internal audit department conduct an examination of the computer activities of the products division.
Smith: I don't know much about the technicalities of computers,but the division has some of the best computer people in the company.
Jones: Do you know whether the internal controls we have implemented are satisfactory?
Smith: I suppose they are.No one has complained.What's so important about controls anyway,as long as the system works? I don't even know what type of controls we should have for our system.
Jones: Ms.Marks,can you explain the objective of computer controls and provide us some examples?
Required:
Address Ms.Marks' response to the following points:
a.State the principal objective of achieving control over (1)input,(2)processing,and (3)output.
b.Provide examples of (1)input controls,(2)processing controls,and (3)output controls.

Accepted Answer

a.
(1)The objective of input controls is

Question 8

The audit team made a copy of the client's sales and billing program early in the audit.Several times during the audit,the team used this copy of the program to process actual client data.The output of the secured program was compared to that of the client's system.This audit technique would be considered

Accepted Answer

A)  Generalized audit software. 
B)  Parallel simulation. 
C)  Test data. 
D)  Tagging transactions. 
A)  Generalized audit software. 
B)  Parallel simulation. 
C)  Test data. 
D)  Tagging transactions.

Question 9

As part of assessing the risk of material misstatement,the audit team must assess the control risk in the computerized processing system(s).Initially,the audit team must identify the overall processing scope of the system(s),which would include each of the following considerations except

Accepted Answer

A)  The types of transactions that are processed through the system(s). 
B)  The specific control procedures that have been implemented by the client to prevent or detect misstatements that could occur based on the audit team's analysis. 
C)  The programs and files that are accessed by the system(s) in processing transactions. 
D)  The type of output that is created as a result of processing transactions through the system(s). 
A)  The types of transactions that are processed through the system(s). 
B)  The specific control procedures that have been implemented by the client to prevent or detect misstatements that could occur based on the audit team's analysis. 
C)  The programs and files that are accessed by the system(s) in processing transactions. 
D)  The type of output that is created as a result of processing transactions through the system(s).

Question 10

Which of the following input controls would be least likely to identify the failure of an employee to input a transaction for which documentary evidence has been prepared?

Accepted Answer

A)  Batch totals. 
B)  Hash totals. 
C)  Missing data tests. 
D)  Sequence tests. 
A)  Batch totals. 
B)  Hash totals. 
C)  Missing data tests. 
D)  Sequence tests.

Question 11

An audit team's approach to evaluating computerized processing systems that compares source documents to the computer output is known as auditing

Accepted Answer

A)  Around the computer. 
B)  Through the computer. 
C)  Without the computer. 
D)  With the computer. 
A)  Around the computer. 
B)  Through the computer. 
C)  Without the computer. 
D)  With the computer.

Question 12

_____________________________ prepare flowcharts and code the logic of the computer programs required by the overall system designed by the systems analyst.

Accepted Answer

The answer of _____________________________ prepare flowcharts and code the logic...

Question 13

Four methods that are used by audit teams to test the operating effectiveness of controls include inquiry,observation,documentation examination,and ______________________

Accepted Answer

The answer of Four methods that are used by audit...

Question 14

Which of the following controls most likely would ensure that an organization can reconstruct its financial records?

Accepted Answer

A)  Hardware controls are built into the computer by the computer manufacturer. 
B)  Backup files are stored in a location separate from original copies. 
C)  Personnel who are independent of data input perform parallel simulations. 
D)  System flowcharts provide accurate descriptions of computer operations. 
A)  Hardware controls are built into the computer by the computer manufacturer. 
B)  Backup files are stored in a location separate from original copies. 
C)  Personnel who are independent of data input perform parallel simulations. 
D)  System flowcharts provide accurate descriptions of computer operations.

Question 15

_____________________________ processing occurs when a group of similar transactions is accumulated and processed simultaneously.

Accepted Answer

The answer of _____________________________ processing occurs when a group of...

Question 16

Which of the following automated application controls would offer reasonable assurance that inventory data were completely and accurately entered?

Accepted Answer

A)  Sequence checking. 
B)  Batch totals. 
C)  Limit tests. 
D)  Check digits. 
A)  Sequence checking. 
B)  Batch totals. 
C)  Limit tests. 
D)  Check digits.

Question 17

An embedded audit module creates simulated data to be processed by the client's computerized processing system.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following ensures that the coding of data does not change when it is moved from one internal storage location to another?

Accepted Answer

A)  Preventive maintenance. 
B)  Echo check. 
C)  Internal label. 
D)  Parity check. 
A)  Preventive maintenance. 
B)  Echo check. 
C)  Internal label. 
D)  Parity check.

Question 19

Which of the following control procedures most likely could prevent computer personnel from modifying programs to bypass computer controls?

Accepted Answer

A)  Periodic management review of computer utilization reports and systems documentation. 
B)  Separation of duties for computer programming and computer operations. 
C)  Participation of user department personnel in designing and approving new systems. 
D)  Physical security of computer facilities in limiting access to computer equipment. 
A)  Periodic management review of computer utilization reports and systems documentation. 
B)  Separation of duties for computer programming and computer operations. 
C)  Participation of user department personnel in designing and approving new systems. 
D)  Physical security of computer facilities in limiting access to computer equipment.

Question 20

A(n)__________________________________________ involves testing the client's processing system and controls by creating a dummy department or branch.

Accepted Answer

integrated

A numerical field appended to an identification number that serves as an input control is a(n)

The purpose of test data is to determine whether

Computer operations controls are typically implemented for files and data used in processing.The major objectives of these controls include each of the following except

The use of the systems development life cycle is an example of an access to programs and data control.

Audit teams can use the computer to test the operating effectiveness of the client's controls in each of the following cases except to

Computer controls that are pervasive and apply to all applications of a computerized processing system are referred to as

As part of assessing the risk of material misstatement,the audit team must assess the control risk in the computerized processing system(s).Initially,the audit team must identify the overall processing scope of the system(s),which would include each of the following considerations except

Which of the following input controls would be least likely to identify the failure of an employee to input a transaction for which documentary evidence has been prepared?

An audit team's approach to evaluating computerized processing systems that compares source documents to the computer output is known as auditing

_____________________________ prepare flowcharts and code the logic of the computer programs required by the overall system designed by the systems analyst.

Four methods that are used by audit teams to test the operating effectiveness of controls include inquiry,observation,documentation examination,and ______________________

Which of the following controls most likely would ensure that an organization can reconstruct its financial records?

_____________________________ processing occurs when a group of similar transactions is accumulated and processed simultaneously.

Which of the following automated application controls would offer reasonable assurance that inventory data were completely and accurately entered?

An embedded audit module creates simulated data to be processed by the client's computerized processing system.

Which of the following ensures that the coding of data does not change when it is moved from one internal storage location to another?

Which of the following control procedures most likely could prevent computer personnel from modifying programs to bypass computer controls?

A(n)__________________________________________ involves testing the client's processing system and controls by creating a dummy department or branch.

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Filters

Exam 20: Auditing in a Computerized Environment

A numerical field appended to an identification number that serves as an input control is a(n)

The purpose of test data is to determine whether

Computer operations controls are typically implemented for files and data used in processing.The major objectives of these controls include each of the following except

The use of the systems development life cycle is an example of an access to programs and data control.

Audit teams can use the computer to test the operating effectiveness of the client's controls in each of the following cases except to

Computer controls that are pervasive and apply to all applications of a computerized processing system are referred to as

As part of assessing the risk of material misstatement,the audit team must assess the control risk in the computerized processing system(s).Initially,the audit team must identify the overall processing scope of the system(s),which would include each of the following considerations except

Which of the following input controls would be least likely to identify the failure of an employee to input a transaction for which documentary evidence has been prepared?

An audit team's approach to evaluating computerized processing systems that compares source documents to the computer output is known as auditing

_____________________________ prepare flowcharts and code the logic of the computer programs required by the overall system designed by the systems analyst.

Four methods that are used by audit teams to test the operating effectiveness of controls include inquiry,observation,documentation examination,and ______________________

Which of the following controls most likely would ensure that an organization can reconstruct its financial records?

_____________________________ processing occurs when a group of similar transactions is accumulated and processed simultaneously.

Which of the following automated application controls would offer reasonable assurance that inventory data were completely and accurately entered?

An embedded audit module creates simulated data to be processed by the client's computerized processing system.

Which of the following ensures that the coding of data does not change when it is moved from one internal storage location to another?

Which of the following control procedures most likely could prevent computer personnel from modifying programs to bypass computer controls?

A(n)__________________________________________ involves testing the client's processing system and controls by creating a dummy department or branch.

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Filters