Which of the following is an advantage of computer-assisted audit techniques (CAATs)?a. All the CAATs programs are written in one computer language.b. The software can be used for audits of clients that use differing computer equipment and file formats.c. The use of CAATs has reduced the need for the auditor to study input controls for computer-related procedures.d. The use of CAATs can be substituted for a relatively large part of the required testing.

Which of the following is an advantage of computer-assisted audit techniques (CAATs)?a. All the CAATs programs are written in one computer language.b. The software can be used for audits of clients that use differing computer equipment and file formats.c. The use of CAATs has reduced the need for the auditor to study input controls for computer-related procedures.d. The use of CAATs can be substituted for a relatively large part of the required testing.

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter1: The Information System: An Accountant’s Perspective

Section: Chapter Questions

Problem 14MCQ: Which of the following statements is most accurate? a. ERP systems are commercial software packages...

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Which of the following statements is most accurate? a. ERP systems are commercial software packages that are sometimes called turnkey systems because they can be implemented by the user with little or no modification. b. Substantive tests provide evidence focused on the system controls. c. Public accounting firms that provide attest services are not allowed under SOX to offer IT advisory services. d. Both small and large firms that have standardized information needs are potential customers for commercial software. e. External auditors may rely on the work of internal auditors only if they report to the controller or the CEO of the client company.
A primary advantage of using generalized audit software packages to audit the financial statements of a client that uses a computer system is that the auditor may: a.Access information stored on computer files while having a limited understanding of the client’s hardware and software features. b.Consider increasing the use of substantive tests of transactions in place of analytical procedures. c.Substantiate the accuracy of data through selfchecking digits and hash totals. d.Reduce the level of required tests of controls to a relatively small amount.
When using test data, why are audit teams required to prepare only one transaction to test each IT control?a. The speed and efficiency of the computer results in reduced sample sizes.b. The risk of misstatement is typically lower in an IT environment.c. Audit teams generally perform more extensive substantive testing in an IT environment, resulting in less need to test processing controls.d. In an IT environment, each transaction is handled in an identical manner.
Which of the following is NOT an audit technique for auditing computerized AIS? a. Continuous auditing b. All of the above are techniques used to audit computerized AIS c. parallel simulation d. Use of specialized control software
Among the client electronic data processing (EDP) systems listed below, which one can typically undergo an audit without the need for examining or directly testing the EDP computer programs of the system? Select one: a. A system that updates a few essential master files and produces no printed output other than final balances. b. A system that affects a number of essential master files and produces a limited output. c. A system that performs relatively uncomplicated processes and produces detailed output. d. A system that performs relatively complicated processing and produces very little detailed output. Question 8 Not yet answered Marked out of 1 Flag question Question text In the aftermath of the initial stage of examini
Among the client electronic data processing (EDP) systems listed below, which one can typically undergo an audit without the need for examining or directly testing the EDP computer programs of the system?Select one: a. A system that updates a few essential master files and produces no printed output other than final balances. b. A system that affects a number of essential master files and produces a limited output. c. A system that performs relatively uncomplicated processes and produces detailed output. d. A system that performs relatively complicated processing and produces very little detailed output.
The client’s computerized exception reporting system helps audit teams conduct a moreefficient audit because ita. Condenses data significantly.b. Highlights abnormal conditions.c. Decreases the necessary level of tests of computer controls.d. Is an efficient computer input control.
When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach? A. Test data are coded to a dummy subsidiary so they can be extracted from the system under actual operating conditions. B. Test data programs need NOT be tailor-made by the auditor for each client's computer applications. C. Test data programs usually consist of all possible valid and invalid conditions reguarding compliance with internal controls. D. Test data are processed with the client's computer and the results are compared with the auditor's predetermined results.
Now consider “segregation of duties.” Determine why it is important in an IT environment. What are some advantages of using IT and audit software when conducting an audit?
You are conducting substantive tests on the Accounts Receivable file to verify its accuracy. The file is large, and you decide to test only a sample of records. Because of the complexity of the database structure, you cannot access the database directly. The client's systems programmer uses a utility program to write a query that produces a flat file, which he provides for testing purposes. Discuss any concerns you would have as an auditor and any actions you would take.
You are conducting substantive tests on the accounts receivable file to verify its accuracy. The file is large, and you decide to test only a sample of the records. Because of the complexity of the database structure, you cannot access the database directly. The client’s systems programmer uses a utility program to write a query that produces a flat file, which he provides for testing purposes. Required Discuss any concerns you would have as an auditor and any actions you would take.
Questions Explain how client internal controls can be improved through the proper installation of IT. Identify risks for accounting systems that rely heavily on IT functions. Define what is meant by an audit trail and explain how it can be affected by the client’s integration of IT. Distinguish between random error resulting from manual processing and systematic error resulting from IT processing and give an example of each category of error. Identify the traditionally segregated duties in noncomplex IT systems and explain how increases in the complexity of the IT function affect that separation. Distinguish between general controls and application controls and give two examples of each. Identify the typical duties within an IT function and describe how those duties should be segregated among IT personnel. Explain how the effectiveness of general controls affects the auditor’s tests of automated application controls, including the auditor’s ability to rely on tests done in prior…