Question 1

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

Accepted Answer

A)   testing authorisation of transactions
B)   testing input data to final reports
C)   testing online passwords
D)   testing data access controlsE) A) and B)
F) All of the above

Question 2

Generalised audit software is:

Accepted Answer

A)   used when client's software is not compatible with the auditor's.
B)   a method of verifying the client's data recorded in a machine language.
C)   often used even when client's data are not computerised.
D)   all of the aboveE) B) and C)
F) B) and D)

Question 3

Which one of the following computer-assisted auditing techniques allows fictitious and real transactions to be processed together without client operating personnel being aware of the testing process?

Accepted Answer

A)   Parallel simulation
B)   Integrated test facility
C)   Generalised audit software programming
D)   Test data approachE) A) and D)
F) B) and D)

Question 4

Program-oriented CAATs:

Accepted Answer

A)   are useful primarily for substantive procedures.
B)   allow the auditor to select records for further testing.
C)   may be applied regardless of the level of assessed control risk in an application.
D)   none of the aboveE) A) and C)
F) A) and B)

Question 5

Which one of the following statements is incorrect about network environments?

Accepted Answer

A)   Network-related software often lacks the security features typically available in traditionally centralised systems.
B)   Many environments lack standardised procedures.
C)   Responsibility for purchasing equipment usually resides with a centralised IT function.
D)   Decentralised servers often increase control risk.E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

A)   comparing creditor statements with accounts payable files
B)   inquiry of management policy on aged debtors
C)   random sampling of all other receivables
D)   totalling the client's accounts receivable balancesE) A) and D)
F) None of the above

Question 7

Which two broad control groupings for IT systems are described by auditing standards?
1) General controls
2) application controls
3) information controls
4) performance controls

Accepted Answer

A)   2 and 3
B)   3 and 4
C)   1 and 3
D)   1 and 2E) A) and D)
F) None of the above

Question 8

Oversight of the IT function to ensure that all activities are carried out consistently with the IT strategic plan is the responsibility of the:

Accepted Answer

A)   chief information officer.
B)   data control group.
C)   librarian.
D)   computer operators.E) None of the above
F) B) and C)

Question 9

A firewall is a system of hardware and software that monitors and controls the flow of e-commerce communications by channelling all network connections through a control gateway.

Accepted Answer

A) True 
 B)False

Question 10

Auditing around the computer is acceptable when general controls are strong.

Accepted Answer

A) True 
 B)False

Question 11

An auditor who is testing IT controls in a payroll system would most likely use test data that contains conditions such as:

Accepted Answer

A)   deductions not authorised by employees.
B)   overtime not approved by supervisors.
C)   time tickets with invalid job numbers.
D)   payroll cheques with unauthorised signatures.E) All of the above
F) C) and D)

Question 12

A database management system:

Accepted Answer

A)   allows quick retrieval of data, but at the cost of inefficient use of file space.
B)   allows quick retrieval of data, but it needs to update files continually.
C)   stores data in different files for different purposes, but always knows where they are and how to retrieve them.
D)   reduces data redundancy.E) C) and D)
F) A) and B)

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a function of an embedded audit module approach?

Accepted Answer

A)   Tests data used to test specific controls.
B)   Analyses the client data.
C)   Uses software to define the content of data records.
D)   Inserts an audit module into the client's application system.E) None of the above
F) B) and C)

Question 15

Which of the following is a generalised audit software package?

Accepted Answer

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

Question 16

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

Accepted Answer

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

Question 17

Which one of the following is NOT an application control?

Accepted Answer

A)   processing controls
B)   hardware controls
C)   output controls
D)   input controlsE) A) and B)
F) A) and C)

Question 18

Which of the following output controls is most important?

Accepted Answer

A)   review of the data for reasonableness by someone who knows what the output should look like
B)   control totals, which are used to verify that the computer's results are correct
C)   distribution control, which assures that only authorised personnel receive the reports generated by the system
D)   logic tests, which verify that no mistakes were made in processingE) B) and C)
F) A) and D)

Question 19

Discuss the major factors associated with complex IT systems that increase control risk and the likelihood of material misstatements in the financial statements.

Accepted Answer

Factors associated with complex IT syste...

Question 20

Which one of the following is NOT usually part of a contingency plan?

Accepted Answer

A)   regular changing of access codes
B)   identifying alternative hardware that can be used to process company data
C)   backing up critical data files
D)   storing copies of critical software off premisesE) A) and B)
F) B) and C)

Exam 10: The impact of information technology on the audit process

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

Correct AnswerverifiedShow Answer

Program-oriented CAATs:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which one of the following statements is incorrect about network environments?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following output controls is most important?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Generalised audit software is:

Correct AnswerverifiedShow Answer

A firewall is a system of hardware and software that monitors and controls the flow of e-commerce communications by channelling all network connections through a control gateway.

Correct AnswerverifiedShow Answer

Which one of the following is NOT an application control?

Correct AnswerverifiedShow Answer

Which one of the following is NOT usually part of a contingency plan?

Correct AnswerverifiedShow Answer

An auditor who is testing IT controls in a payroll system would most likely use test data that contains conditions such as:

Correct AnswerverifiedShow Answer

Which one of the following computer-assisted auditing techniques allows fictitious and real transactions to be processed together without client operating personnel being aware of the testing process?

Correct AnswerverifiedShow Answer

Discuss the major factors associated with complex IT systems that increase control risk and the likelihood of material misstatements in the financial statements.

Correct AnswerverifiedFactors associated with complex IT syste...View AnswerShow Answer

A database management system:

Correct AnswerverifiedShow Answer

Auditing around the computer is acceptable when general controls are strong.

Correct AnswerverifiedShow Answer

Which two broad control groupings for IT systems are described by auditing standards? 1) General controls 2) application controls 3) information controls 4) performance controls

Correct AnswerverifiedShow Answer

Which of the following is a function of an embedded audit module approach?

Correct AnswerverifiedShow Answer

Which of the following is a generalised audit software package?

Correct AnswerverifiedShow Answer

Oversight of the IT function to ensure that all activities are carried out consistently with the IT strategic plan is the responsibility of the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Factors associated with complex IT syste...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified