Deck 5: The Modern Audit and Continuous Auditing

Question 1

Both simple and complex data analytics can be applied to a client's data during the planning stage of the audit to identify which areas the auditor should focus on.

Answer 1

True

Question 2

The Order to Cash Subledger Standard focuses on sales orders,accounts receivable,shipments,invoices,cash receipts and adjustments to accounts.

Answer 2

True

Question 3

A flat file is a double table of data with user-defined attributes.

Answer 3

False

Question 4

Systems translator software maps the various tables and fields from varied ERP systems into a consistent format.

Question 5

The Procure to Pay Subledger Standard identifies data needed for purchase orders,goods received,invoices,payments,and adjustments to accounts.

Question 6

The Base Standard defines the order for files and fields as well as some master data for users and business units.

Question 7

A data warehouse is a repository of data,including financial data,accumulated from internal and external data sources,to help management decision making.

Question 8

Production systems are those active systems that collect,report,and are directly affected by current transactions.

Question 9

Heterogeneous systems represent multiple installations or instances of a system.

Question 10

The Audit Data Standards define common tables and fields that are needed by auditors to perform common audit tasks.The Securities and Exchange Commission,or SEC,developed these standards.

Question 11

The evaluation of audit data may be distilled into a feasibility score.

Question 12

Production systems are those active systems that collect,report,and are directly affected by future transactions.

Question 13

The Inventory Subledger Standard defines product master data,location data,inventory on hand data,and inventory movement.

Question 14

Systems translator software maps the various tables and fields from varied EMR systems into a consistent format.

Question 15

Heterogeneous systems represent one single installation or instance of a system.

Question 16

The General Ledger Standard adds the chart of accounts,source listings,trial balance,and GL detail.

Question 17

Continuous auditing is a process that provides real-time assurance over business processes and systems.

Question 18

Data analytics and audit automation allow auditors to occasionally monitor and ignore the systems and processes within their companies.

Question 19

A flat file is a single table of data with user-defined attributes.

Question 20

An audit plan consists solely of a methodology which directs the audit work and includes substantive testing.

Question 21

Which of the following best defines the Accounting Data Standards: Inventory Subledger?

A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
D) defines product master data, location data, inventory on hand data, and inventory movement.

Question 22

Which of the following describes a homogenous systems approach?

A) ensures that all of its divisions and subsidiaries use a uniform installation of the chosen ERP system
B) allows all divisions and subsidiaries use the ERP system that works best for each location
C) provides a single table of data with user-defined attributes that is stored separate from any application
D) maps the various tables and fields from multiple ERP systems

Question 23

Under the guidance of the chief audit executive (CAE)or another manager,teams can develop and implement analytical techniques to aid the following audits except:

A) governance audits.
B) risk audits.
C) management audits.
D) compliance audits.

Question 24

Which of the following describes an example of a flat file:

A) ensures that all of its divisions and subsidiaries use a uniform installation of the chosen ERP system
B) allows all divisions and subsidiaries use the ERP system that works best for each location
C) provides a single table of data with user-defined attributes that is stored separate from any application
D) maps the various tables and fields from multiple ERP systems

Question 25

Which Accounting Data Standards ledger identifies data needed for purchase orders,goods received,invoices,payments,and adjustments to accounts?

A) Base Standard
B) General Ledger Standards
C) Procure to Pay Subledger Standard
D) Inventory Subledger Standard

Question 26

Which of the following best defines the Accounting Data Standards: Procure to Pay Subledger?

A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
D) defines product master data, location data, inventory on hand data, and inventory movement.

Question 27

________ ensures that all of its divisions and subsidiaries use a uniform installation of one ERP system. ________ allows for the use of bolt on the systems of companies that are acquired and uses a series of translators to convert the output of various systems into usable financial information.

A) Continuous reporting; continuous monitoring
B) Continuous monitoring; continuous reporting
C) The heterogeneous systems approach; the homogenous systems approach
D) The homogenous systems approach; the heterogeneous systems approach

Question 28

Which Accounting Data Standard defines the format for files and fields as well as some master data for users and business units?

A) Base Standard
B) General Ledger Standards
C) Order to Cash Subledger
D) Procure to Pay Subledger Standard

Question 29

Which of the following best defines the Accounting Data Standards: Order to Cash Subledger?

A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts, and adjustments to accounts.
B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
D) defines product master data, location data, inventory on hand data, and inventory movement.

Question 30

Which Accounting Data Standard focuses on sales orders,accounts receivable,shipments,invoices,cash receipts and adjustments to accounts?

A) General Ledger Standards
B) Order to Cash Subledger
C) Procure to Pay Subledger Standard
D) Inventory Subledger Standard

Question 31

Which Accounting Data Standard identifies product master data,location data,inventory on hand data,and inventory movement?

A) Base Standard
B) General Ledger Standards
C) Procure to Pay Subledger Standard
D) Inventory Subledger Standard

Question 32

Under the guidance of the chief audit executive (CAE)or another manager,teams can develop and implement analytical techniques to aid the following audits except:

A) financial statement audits.
B) archaic audits.
C) process efficiency audits.
D) forensic audits.

Question 33

________ constantly evaluates internal controls and transactions and ________ provides the status of the system so that an auditor can know at any given time whether the system is operating within the parameters.

A) Continuous reporting; continuous monitoring
B) Continuous monitoring; continuous reporting
C) The heterogeneous systems approach; the homogenous systems approach
D) The homogenous systems approach; the heterogeneous systems approach

Question 34

Which Accounting Data Standard includes the chart of accounts,source listings,trial balance,and GL (journal entry)detail?

A) Base Standard
B) General Ledger Standards
C) Order to Cash Subledger
D) Procure to Pay Subledger Standard

Question 35

Which of the following best defines the Accounting Data Standards: General Ledger?

A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
D) defines the format for files and fields as well as some master data for users and business units.

Question 36

Which of the following is an example of systems translator software:

A) collects, reports, and is directly affected by current transactions.
B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
C) provides a single table of data with user-defined attributes that is stored separately from any application.
D) maps the various tables and fields from multiple ERP systems.

Question 37

Which of the following describes a heterogeneous system approach:

A) collects, reports, and is directly affected by current transactions.
B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
C) provides a single table of data with user-defined attributes that is stored separately from any application.
D) maps the various tables and fields from multiple ERP systems.

Question 38

Under the guidance of the chief audit executive (CAE)or another manager,teams can develop and implement analytical techniques to aid the following audits except:

A) information systems audits.
B) social media audits.
C) compliance audits.
D) forensic audits in the case of fraud.

Question 39

Which of the following describes an example of a production systems:

A) collects, reports, and is directly affected by current transactions.
B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
C) provides a single table of data with user-defined attributes that is stored separately from any application.
D) maps the various tables and fields from multiple ERP systems.

Question 40

Which of the following best defines the Accounting Data Standards: Base Standard?

A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
D) defines the format for files and fields as well as some master data for users and business units.

Question 41

Continuous auditing relies heavily on alarms,which are essentially notifications of a classification problem.________ is an abnormal transaction is not classified as problematic.

A) False negative
B) True negative
C) True positive
D) False positive

Question 42

Chapter 5 discusses the essential properties of working papers.With respect to data analytics,working papers should contain the following items except:

A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
B) IT-related documentation, including flowchart and process maps that provide system understanding
C) database maps and data dictionaries that define the location and types of data auditors will analyze
D) memos to future auditors documenting issues with problem members of the client's management team

Question 43

Chapter 5 discusses the essential properties of working papers.With respect to data analytics,working papers should contain the following items except:

A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
B) IT-related documentation, including flowchart and process maps that provide system understanding
C) database maps and data dictionaries that define the location and types of data auditors will analyze
D) documentation of every matter considered during the audit.

Question 44

Continuous auditing relies heavily on alarms,which are essentially notifications of a classification problem.A ________ occurs when too many alarms are false positives.

A) Flood of alarms
B) Exception report
C) A negative event
D) Information overload

Question 45

Chapter 5 discusses the essential properties of working papers.With respect to data analytics,working papers should contain the following items except:

A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
B) evidence, including data extracts, transformed data, and model output that provides support for the functioning controls and management assertions.
C) superseded drafts of working papers or financial statements, notes that reflect incomplete or preliminary thinking, previous copies of documents corrected for typographical or other errors, and duplicates of documents.
D) documentation about existing automated controls, including parameters and variables used for analysis

Question 46

Continuous auditing relies heavily on alarms,which are essentially notifications of a classification problem.A ________ occurs when an abnormal transaction is classified as problematic.

A) False negative
B) True negative
C) True positive
D) False positive

Question 47

Chapter 5 discusses the essential properties of working papers.With respect to data analytics,working papers should contain the following items except:

A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
B) evidence, including performance evaluations, of the competency of the auditors completing the working paper.
C) database maps and data dictionaries that define the location and types of data auditors will analyze
D) documentation about existing automated controls, including parameters and variables used for analysis

Question 48

Continuous auditing relies heavily on alarms,which are essentially notifications of a classification problem.A ________ occurs when a normal transaction is classified as problematic.

A) False negative
B) True negative
C) True positive
D) False positive

Question 49

A ________ is a repository of data accumulated from internal and external data sources,including financial data,to help management decision making.

A) flat file
B) data warehouse
C) homogenous system
D) heterogeneous system

Question 50

Continuous auditing relies heavily on alarms,which are essentially notifications of a classification problem.A ________ occurs when a normal transaction is not classified as problematic.

A) False negative
B) True negative
C) True positive
D) False positive