Question 1

When auditing a client whose information is processed by an outside computer service company, it is acceptable for the auditor to rely on the audit report of another independent auditor who has previously tested the internal controls of the computer service centre rather than testing the service centre's controls himself or herself.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT an example of an applications control?

Accepted Answer

A)   An equipment failure causes an error message on the monitor.
B)   After processing, all sales transactions are reviewed by the sales department.
C)   There are reasonableness tests for the unit selling price of a sale.
D)   Resonableness tests reviewing hours worked by employeesE) B) and C)
F) B) and D)

Question 3

Controls which are designed to assure that the information processed by the computer is authorised, complete and accurate are called:

Accepted Answer

A)   processing controls.
B)   general controls.
C)   output controls.
D)   input controls.E) B) and D)
F) A) and B)

Question 4

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

Accepted Answer

A)   input controls.
B)   manufacturer's controls.
C)   hardware controls.
D)   fail- safe controls.E) B) and C)
F) B) and D)

Question 5

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)   Department numbers
B)   Net pay
C)   Total debits and total credits
D)   Hours workedE) None of the above
F) A) and C)

Question 6

Strong general controls mitigate which type of risks?

Accepted Answer

A)   Risk of system obsolescence
B)   Risk of system crash
C)   Risk of theft of information and data
D)   All of the aboveE) B) and D)
F) B) and C)

Question 7

The day- to- day operations of the computer are the responsibility of management.

Accepted Answer

A) True 
 B)False

Question 8

How do information technologies enhance internal control?

Accepted Answer

A)   Computer controls replace manual controls.
B)   Higher quality information is available.
C)   Computer controls are cheaper.
D)   Both A and B aboveE) None of the above
F) A) and D)

Question 9

The function of an embedded audit module approach:

Accepted Answer

A)   tests data used to test specific controls.
B)   analyses the client data.
C)   inserts an audit module into the client's application system.
D)   uses software to define the content of data records.E) A) and C)
F) A) and B)

Question 10

Which of the following is NOT an example of a test data approach?

Accepted Answer

A)   Testing online passwords
B)   Testing input data to final reports
C)   Testing authorisation of transactions
D)   Testing data access controlsE) A) and B)
F) A) and C)

Question 11

The objective of the computer audit technique known as the test data approach is to determine whether the client's computer programs can correctly process valid and invalid transactions.

Accepted Answer

A) True 
 B)False  True

Question 12

An independent auditor uses generalised audit software. The second step in using GAS, application design, might include which of the following?

Accepted Answer

A)   Design the most useful format and contents of the auditor's GAS reports.
B)   Develop a logical approach to extract and manipulate data obtained from the client's records.
C)   Identify and describe the client's data files and the information to which access is desired.
D)   All of the aboveE) A) and B)
F) None of the above D

Question 13

Which of the following is a generalised audit software package?

Accepted Answer

A)   MYOB
B)   ACL
C)   Visual Basic
D)   None of the aboveE) None of the above
F) A) and B)

Question 14

IT controls are classified as either general or application controls.

Accepted Answer

A) True 
 B)False  True

Question 15

The major disadvantage of generalised audit software is that its complexity limits its use primarily to IT specialists.

Accepted Answer

A) True 
 B)False

Question 16

Generalised audit software can be used to perform many different kinds of tests. Which is NOT one of them?

Accepted Answer

A)   Review of accounts receivable balances for amounts over the credit limit
B)   Observing cash receipts processes
C)   Recalculating employees' net pay calculations
D)   Preparing general ledger trial balancesE) A) and B)
F) A) and C)

Question 17

Generalised audit software can be used to perform many different kinds of tests. Which is NOT one of them?

Accepted Answer

A)   Totalling the client's accounts receivable balances
B)   Random sampling of all other receivables
C)   Inquiry of management policy on aged debtors
D)   Comparing creditor statements with accounts payable filesE) B) and C)
F) None of the above

Question 18

Development and changes to IT systems are generally coordinated by a _ analyst.

Accepted Answer

A)   financial
B)   technical
C)   systems
D)   all of the aboveE) B) and C)
F) A) and D)

Question 19

An advantage of generalised audit software (GAS) is the ability to access and test client data independently.

Accepted Answer

A) True 
 B)False

Question 20

One key to a backup and contingency plan is to make sure that all critical copies of software and data files are backed up and stored off- premises.

Accepted Answer

A) True 
 B)False

Exam 10: The Impact of Information Technology on the Audit Process

Correct Answer
verified

Which of the following is NOT an example of an applications control?

Correct Answer
verified

Controls which are designed to assure that the information processed by the computer is authorised, complete and accurate are called:

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

Strong general controls mitigate which type of risks?

Correct Answer
verified

The day- to- day operations of the computer are the responsibility of management.

Correct Answer
verified

How do information technologies enhance internal control?

Correct Answer
verified

The function of an embedded audit module approach:

Correct Answer
verified

Which of the following is NOT an example of a test data approach?

Correct Answer
verified

The objective of the computer audit technique known as the test data approach is to determine whether the client's computer programs can correctly process valid and invalid transactions.

Correct Answer
verified
True

An independent auditor uses generalised audit software. The second step in using GAS, application design, might include which of the following?

Correct Answer
verified
D

Which of the following is a generalised audit software package?

Correct Answer
verified

IT controls are classified as either general or application controls.

Correct Answer
verified
True

The major disadvantage of generalised audit software is that its complexity limits its use primarily to IT specialists.

Correct Answer
verified

Generalised audit software can be used to perform many different kinds of tests. Which is NOT one of them?

Correct Answer
verified

Generalised audit software can be used to perform many different kinds of tests. Which is NOT one of them?

Correct Answer
verified

Development and changes to IT systems are generally coordinated by a _ analyst.

Correct Answer
verified

An advantage of generalised audit software (GAS) is the ability to access and test client data independently.

Correct Answer
verified

One key to a backup and contingency plan is to make sure that all critical copies of software and data files are backed up and stored off- premises.

Correct Answer
verified

Exam 10: The Impact of Information Technology on the Audit Process

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of an applications control?

Correct AnswerverifiedShow Answer

Controls which are designed to assure that the information processed by the computer is authorised, complete and accurate are called:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Strong general controls mitigate which type of risks?

Correct AnswerverifiedShow Answer

The day- to- day operations of the computer are the responsibility of management.

Correct AnswerverifiedShow Answer

How do information technologies enhance internal control?

Correct AnswerverifiedShow Answer

The function of an embedded audit module approach:

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of a test data approach?

Correct AnswerverifiedShow Answer

The objective of the computer audit technique known as the test data approach is to determine whether the client's computer programs can correctly process valid and invalid transactions.

Correct AnswerverifiedTrue

An independent auditor uses generalised audit software. The second step in using GAS, application design, might include which of the following?

Correct AnswerverifiedD

Which of the following is a generalised audit software package?

Correct AnswerverifiedShow Answer

IT controls are classified as either general or application controls.

Correct AnswerverifiedTrue

The major disadvantage of generalised audit software is that its complexity limits its use primarily to IT specialists.

Correct AnswerverifiedShow Answer

Generalised audit software can be used to perform many different kinds of tests. Which is NOT one of them?

Correct AnswerverifiedShow Answer

Generalised audit software can be used to perform many different kinds of tests. Which is NOT one of them?

Correct AnswerverifiedShow Answer

Development and changes to IT systems are generally coordinated by a _ analyst.

Correct AnswerverifiedShow Answer

An advantage of generalised audit software (GAS) is the ability to access and test client data independently.

Correct AnswerverifiedShow Answer

One key to a backup and contingency plan is to make sure that all critical copies of software and data files are backed up and stored off- premises.

Correct AnswerverifiedShow Answer

Correct Answer
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True

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D

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True

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