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GENERAL CONTROLS
3. Which of the following is least likely to be a general control over computer activities?
a. Procedures for developing new programs and systems
b. Requirements for system documentation
c. An access control
d. A control total
6. Which of the following is a general control that would most likely assist an entity whose system
analyst left the entity in the middle of a major project?
a. Grandfather-father-son record retention
b. Data encryption
c. Systems documentation
d. Check digit verification
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b. Online security
c. Check digit
d. Hardware controls
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APPLICATION CONTROLS
6. Procedures to check data for accuracy and completeness when they enter the system, including
data conversion, and edit checks
a. Application control c. General Control
b. Input control d. Processing Control
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d. Monitoring controls
9. Establish that data are complete and accurate during updating. Example of this are run control
totals, computer matching, and programmed edit checks
a. Data access control
b. Process control
c. Output control
d. Application Control
10. The computer Is sometimes blamed for making errors. In reality, computers make very few
mechanical errors. The most likely source of errors in a fully operational computer-based system
is due to
a. Systems analysis
b. programming
c. input
d. processing
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AUDITING AROUND THE COMPUTER
2. Auditing around the computer is most likely used in the following situations, except;
a. When the managements applications are inadequate
b. When the reliance level in the managements control is high
c. When the system being used is simple
d. When the efficiency of the controls design is low
4. When auditing around the computer, the auditor focuses solely on the source documents which
concerns
a. Clients computer program
b. Printed CBIS outputs
c. Processed written documents
d. Filing
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6. In auditing around the computer, which the following techniques are used to perform test of
controls?
a. Substantive testing
b. Parallel Simulation
c. Reperformance
d. Test Data
8. In obtaining and documentation, understanding of entitys controls under auditing around the
computer involves the following, except;
a. Control environment
b. Accounting Information and Communication
c. System development and documentation
d. Risk Assessment
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AUDITING THROUGH THE COMPUTER
1. The auditor should audit through the computer when, except
a. The processing logic embedded within the application system is complex.
b. Significant parts of the internal control system are embodied in the computer
system.
c. The system is simple and batch oriented
d. The inherent risk associated with the application system is high.
2. Which of the following statement is true about the advantages of auditing through the
computer is true.
I. It is simple approach and can be done by the auditor who has little technical knowledge
of the computer.
II. The auditor is better able to access the systems ability to cope up with the change and
the likelihood of losses or account misstatement arising in the future.
a. Statement I
b. Statement II
c. Both I & II
d. None
3. This requires the auditor to examine the detailed processing routines of the computer to
determine whether the controls in the system are adequate to ensure complete and correct
processing of all data.
a. Auditing around the computer
b. Test Data
c. Parallel Simulation
d. Auditing through the computer
4. Tools used by auditor with the computer to aid in the effective and efficient performance of an
audit whereby the computer programs allow auditors to test computer files and data bases. (If
through the computer approach is adopted).
a. CAATs
b. Generalized Audit Software (GAS)
c. Test Data
d. Integrated Test Facility
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6. All are the approaches in auditing through the computer using CAAT are, except
a. validating computer programs
b. reviewing systems software
c. continuous auditing
d. testing of input & output
7. In auditing through the computer, testing both controls and transactions involves
a. Only physical input and output from automated devices
b. Actual use of computer system
c. Not concern with how processing actually occurs in the system
d. None of the above
8.
I. Auditing through the computer refers both to the study of internal control and to the use of
the computer to perform audit tasks, such as obtaining substantive monetary evidence.
II. Auditing through the computer refers to making use of the computer itself to test the
operative effectiveness of application controls in the program actually used to process
accounting data.
a. Both statement are true
b. Only statement I is true
c. Both statement are false
d. Only statement II is true
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TEST DATA
1. Which is correct about the test data technique?
a. The test data technique is based on auditors creation of input data that should be
processed by clients application
b. The test data technique is based on clients creation of input data that should be processed
by auditors application
c. The test data technique is based on clients and auditors creation of input data that should
be processed by clients application
d. None of the above
5. In conducting audit test data there are some difficulties involve, except:
a. Cost
b. Live testing is dangerous
c. No visible evidence of audit work performed
d. open and involve all the technique
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b. Dummy data in a normal production run
c. Online audit monitor
d. Dummy data in a special run
9. Test data could be held in the form of a batch of documents that is captured into the system to:
a. Test both the manual and computer controls (applications and programmed controls).
b. Assist an auditor in the collection of audit evidence from computerized systems.
c. used to process actual client data
d. possibility of accidental integration of fictitious and actual data
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PARALLEL SIMULATION
1. Which of the following is/ are characteristic/s of parallel testing?
I. Ensures that the new version of the application performs correctly
II. Ensures consistencies and inconsistencies are the same between the old and the new version.
III. Ensures that the systems are running effectively
IV. Verifies if the data format between the two versions have changed
4. I. the auditor processes simulated client data on an audit program similar to some aspect of the
clients program
II.The auditor compares the result of this processing with the results of the processing done by the
clients program
a. Statement 1 is true, statement 2 is false
b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false
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7. Parallel simulation is an audit technique employed to verify processing logic by making use of audit
test program. This audit test program review which statement indicates the use of parallel
simulation audit technique
a. live transactions or process using live program
b. live transactions or process using test ,aster files
c. test transactions are processed using test program
d. live transactions or process using test program
9. Test data, integrated test data and parallel simulation each require an auditor to prepare data and
computer program. CPAs who lack either the technical expertise or time to prepare programs should
request from the manufacturers of EDP consultants for
10. Which of the following computer-assisted auditing techniques processes client input data on a
controlled program under the auditors control to test controls in the computer system?
a. Test data
b. Review of program logic
c. Integrated test facility
d. Parallel simulation
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INTEGRATED TEST FACILITY
1. Which of the following CAATs allows fictitious and real transactions to be processed together
without the knowledge of client operating personnel?
4. Computer assisted audit techniques that auditors may employ to test computer programs, except:
a. Test data c. Access controls
b. Parallel simulation d. Integrated test facility
a. It affirms application systems and tests the ongoing operation of the system
b. It uses actual master files or dummies and the IS auditor does not need to assess the source of
the transactions.
c. Periodic testing does not require separate test processes.
d. The requirement to prepare test data is eliminated.
6. All of the followng statements are true about the Integrated Test Facility (ITF), except:
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c. ITF permits ongoing application auditing.
d. ITF does not disrupt operations or require the intervention of computer service personnel.
9. One of the computer assisted audit techniques that makes up false data and puts it through with
actual client transactions at the beginning of the system and runs it through till the end.
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CAPITAL ACQUISITION AND REPAYMENT CYCLE
1. The primary focuses of the audit of debt are:
a. Accuracy and completeness c. Completeness and valuation
b. Accuracy and existence d. Accuracy and valuation
2. Which of the following accounts is not audited within capital acquisition and repayment cycle?
a. Note payable c. Account payable
b. Interest expense d. Bond payable
3. Which of the following is an auditor least likely to consider in determining the appropriate tests
of details of balances for notes payable?
a. Business risk. c. Results of analytical procedures.
b. Inherent risk. d. Acceptable audit risk.
4. All are controls of the auditor about the audit of Notes Payable, except
6. All are internal controls related to owners equity that are concern to the auditor, except
a. Proper independent verification.
b. Proper authorization of transactions.
c. Proper record keeping and segregation of duties.
d. Independent registrar and stock transfer agent.
7. The audit of owners equity of public and private companies is very different. Which of the
following is not one of these differences?
a. The number of transactions (private companies have fewer transactions)
b. Payment of dividends (public companies rarely pay dividends)
c. Complexity of transactions (public companies have more complex transactions)
d. Type of noncurrent debt(public companies issue more bonds)
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IV- Capital stock are properly presented and disclosed.
a. I, II, III c. I, III, IV
b. II, IV d. I, II, III, IV
9. Which of the following accounts is associated with a transaction cycle other than acquisition and
payment?
a. Common stock c. Accrued property taxes
b. Property, plant and equipment d. Income tax expense
10. Responsibility for the issuance of new notes payable should be vested in the:
a. Board of directors.
b. Purchasing department.
c. Accounting department.
d. Accounts payable department.
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BATCH PROCESSING
3. Misstatements in a batch computer system caused by incorrect programs or data may not be
detected immediately because
a. Errors in some transactions may cause rejection of other transactions in the batch.
b. The identification of errors in input data typically is not part of the program.
c. There are time delays in processing transactions in a batch system.
d. The processing of transactions in a batch system is not uniform.
4. Mill Co. uses a batch processing method to process its sales transactions. Data on Mills sales
transaction tape are electronically sorted by customer number and are subject to programmed edit
checks in preparing its invoices, sales journals, and updated customer account balances. One of the
direct outputs of the creation of this tape most likely would be a
a. Report showing exceptions and control totals.
b. Printout of the updated inventory records.
c. Report showing overdue accounts receivable.
d. Printout of the sales price master file.
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7. Batch processing system might be appropriate for all the following except:
a. Maintain inventory control
b. To meet expected sales discount
c. Perform production operations
d. Plan and control productions
9. Errors in data processed in a batch computer system may not be detected immediately because
a. Transaction trails in a batch system are available only for a limited period of time.
b. There are time delays in processing transactions in a batch system.
c. Errors in some transactions cause rejections of other transaction in a batch.
d. Random errors are more likely in a batch system than in a on-line system.
10. When source documents, such as payroll time cards or sales orders , are accumulated daily, weekly,
or monthly and the input is validated to create a transaction file, this is called
a. On- line input with real-time processing
b. On-line input with batch processing
c. Batch input and processing
d. Batch input with real-time processing
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ON-LINE REAL TIME
(OL-RT)
1. The computer process whereby data processing is performed concurrently with a particular
activity and the results are available soon enough to influence the course of action being taken
or the decision being made is called:
a. Random access sampling
b. Integrated data processing
c. On-line, real-time system
d. Batch processing system
4. The following are sub processes of Online Real-time system. Which one does not belong?
a. Business Events and Data
b. Master Data
c. Generated Reports
d. None of these
5. All of the following are factors to consider in designing an online real-time system, which one
does not belong?
a. Interrupts
b. Queues
c. Priority Allocation
d. None of the above
6. What type of online computer system is characterized by data that are assembled from
more than one location and records that are updated immediately?
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7. Express Padala, Inc. stated in one of its mission statements that positive control of each
package will be maintained by utilizingelectronic tracking and tracing sytems, Express
Padala uses what type of IT system?
a. Batch processing which features immediate updating as to the location of packages.
b. Real-time processing which features updating at fixed time periods.
c. Batch processing which features updating at fixed time periods.
d. Real-time processing features immediate updating as to the location of packages.
8. An entity has recently converted its revenue/receipt cycle from a manual processing to
an online, real-time processing system. Which is the most probable result associated
with conversion to the new computerized processing system?
a. Less segregation of traditional duties
b. Significant increase in processing time
c. Reduction in the entitys risk exposures
d. Increase in processing errors
10. This type of application in an OLRT continuously process feedback data to adjust one or more
outputs.
a. General purpose OS
b. Event response
c. Closed loop control
d. None of the above
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