Question 1

The IT auditing approach referred to as "Auditing through the system" is necessary under which of the following conditions?

Accepted Answer

A) Supporting documents are available in both electronic and paper form. 
B) The auditor does not require evaluation of computer controls. 
C) The auditor wants to test computer controls as a basis for evaluating risk and reducing the amount of substantive audit testing required. 
D) The use of the IT system has a low impact on the conduct of the audit. 
A) Supporting documents are available in both electronic and paper form. 
B) The auditor does not require evaluation of computer controls. 
C) The auditor wants to test computer controls as a basis for evaluating risk and reducing the amount of substantive audit testing required. 
D) The use of the IT system has a low impact on the conduct of the audit.

Question 2

Audit tests developed for an audit client are documented in an):

Accepted Answer

A) Audit Program 
B) Audit Objective 
C) Management Assertion 
D) General Objectives 
A) Audit Program 
B) Audit Objective 
C) Management Assertion 
D) General Objectives

Question 3

Which of the following terms in not associated with a financial statement auditor's requirement to maintain independence?

Accepted Answer

A) Objectivity 
B) Neutrality 
C) Professional Skepticism 
D) Competence
TEST BANK - CHAPTER 7 - MULTIPLE CHOICE 
A) Objectivity 
B) Neutrality 
C) Professional Skepticism 
D) Competence
TEST BANK - CHAPTER 7 - MULTIPLE CHOICE

Question 4

The existence of IT-based business processes often result in details of transactions being entered directly into the computer system, results in a lack of physical evidence to visibly view.This situation is referred to as:

Accepted Answer

A) Physical Evidence Risk 
B) Loss of Audit Trail Visibility 
C) Transaction Summary Chart 
D) Lack of Evidence View 
A) Physical Evidence Risk 
B) Loss of Audit Trail Visibility 
C) Transaction Summary Chart 
D) Lack of Evidence View

Question 5

The chance that information used by decision makers may be inaccurate is referred to as:

Accepted Answer

A) Sample Risk 
B) Data Risk 
C) Audit Trail Risk 
D) Information Risk 
A) Sample Risk 
B) Data Risk 
C) Audit Trail Risk 
D) Information Risk

Question 6

This type of audit is performed by independent auditors who are objective and neutral with respect to the company and the information being audited.

Accepted Answer

A) Compliance Audit 
B) Operational Audit 
C) Internal Audit 
D) External Audit 
A) Compliance Audit 
B) Operational Audit 
C) Internal Audit 
D) External Audit

Question 7

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

Accepted Answer

A) Risk 
B) Materiality 
C) Substantive 
D) Sampling 
A) Risk 
B) Materiality 
C) Substantive 
D) Sampling

Question 8

Adapting to fair value measures in the preparation of IFRS-based financial statements will likely cause auditors to evaluate supporting evidence differently than if US GAAP was used.

Accepted Answer

A) True 
 B)False

Question 9

Independence in mental attitude is to be maintained in all matters related to the audit engagement.This is one of the generally accepted auditing standards that is part of the:

Accepted Answer

A) General Standards 
B) Operating Standards 
C) Fieldwork Standards 
D) Reporting Standards 
A) General Standards 
B) Operating Standards 
C) Fieldwork Standards 
D) Reporting Standards

Question 10

Which of the following describes a mathematical sum of data that is meaningless to the financial statements but useful for controlling the data and detecting possible missing items?

Accepted Answer

A) Hash Total 
B) Batch Total 
C) Validation Check 
D) Sequence Verification total 
A) Hash Total 
B) Batch Total 
C) Validation Check 
D) Sequence Verification total

Question 11

Auditors have the primary responsibility to make sure that they comply with international standards in all cases.

Accepted Answer

A) True 
 B)False

Question 12

The use of generalized audit software is especially useful when there are large volumes of data and when there is a need for accurate information.

Accepted Answer

A) True 
 B)False

Question 13

All users of financial data - business managers, investors, creditors, and government agencies - have an enormous amount of data to use to make decisions.Due to the use of IT systems, it is easy to verify the accuracy and completeness of the information.

Accepted Answer

A) True 
 B)False

Question 14

Many companies design their IT system so that all documents and reports can be retrieved from the system in readable form.Auditors can then compare the documents used to input the data into the system with reports generated from the system, without gaining any extensive knowledge of the computer system and does not require the evaluation of computer controls.This process is referred to as:

Accepted Answer

A) Auditing through the system 
B) Auditing around the system 
C) Computer assisted audit techniques 
D) Auditing with the computer 
A) Auditing through the system 
B) Auditing around the system 
C) Computer assisted audit techniques 
D) Auditing with the computer

Question 15

Computer-assisted audit techniques are useful audit tools because they make it possible for auditors to use computers to audit large amounts of evidence in less time.

Accepted Answer

A) True 
 B)False

Question 16

Auditors must think about how the features of a company's IT systems influence its management assertions and the general audit objectives even though these matters have little or no impact on the choice of audit methodologies used.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following computer assisted auditing techniques processes actual client input data or a copy of the real data) on a controlled program under the auditor's control to periodically test controls in the client's computer system?

Accepted Answer

A) Test data method 
B) Embedded audit module 
C) Integrated test facility 
D) Parallel simulation 
A) Test data method 
B) Embedded audit module 
C) Integrated test facility 
D) Parallel simulation

Question 18

The likelihood that errors or fraud may occur is referred to as:

Accepted Answer

A) Risk 
B) Materiality 
C) Control Tests 
D) Sampling 
A) Risk 
B) Materiality 
C) Control Tests 
D) Sampling

Question 19

The role of the auditor is to analyze the underlying facts to decide whether information provided by management is fairly presented.

Accepted Answer

A) True 
 B)False

Question 20

Auditors should develop a written audit program so that:

Accepted Answer

A) All material transactions will be included in substantive testing. 
B) Substantive testing performed prior to year end will be minimized. 
C) The procedures will achieve specific audit objectives related to specific management assertions. 
D) Each account balance will be tested under either a substantive test or a test of controls. 
A) All material transactions will be included in substantive testing. 
B) Substantive testing performed prior to year end will be minimized. 
C) The procedures will achieve specific audit objectives related to specific management assertions. 
D) Each account balance will be tested under either a substantive test or a test of controls.

The IT auditing approach referred to as "Auditing through the system" is necessary under which of the following conditions?

Audit tests developed for an audit client are documented in an):

Which of the following terms in not associated with a financial statement auditor's requirement to maintain independence?

The existence of IT-based business processes often result in details of transactions being entered directly into the computer system, results in a lack of physical evidence to visibly view.This situation is referred to as:

The chance that information used by decision makers may be inaccurate is referred to as:

This type of audit is performed by independent auditors who are objective and neutral with respect to the company and the information being audited.

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

Adapting to fair value measures in the preparation of IFRS-based financial statements will likely cause auditors to evaluate supporting evidence differently than if US GAAP was used.

Independence in mental attitude is to be maintained in all matters related to the audit engagement.This is one of the generally accepted auditing standards that is part of the:

Which of the following describes a mathematical sum of data that is meaningless to the financial statements but useful for controlling the data and detecting possible missing items?

Auditors have the primary responsibility to make sure that they comply with international standards in all cases.

The use of generalized audit software is especially useful when there are large volumes of data and when there is a need for accurate information.

All users of financial data - business managers, investors, creditors, and government agencies - have an enormous amount of data to use to make decisions.Due to the use of IT systems, it is easy to verify the accuracy and completeness of the information.

Computer-assisted audit techniques are useful audit tools because they make it possible for auditors to use computers to audit large amounts of evidence in less time.

Auditors must think about how the features of a company's IT systems influence its management assertions and the general audit objectives even though these matters have little or no impact on the choice of audit methodologies used.

Which of the following computer assisted auditing techniques processes actual client input data or a copy of the real data) on a controlled program under the auditor's control to periodically test controls in the client's computer system?

The likelihood that errors or fraud may occur is referred to as:

The role of the auditor is to analyze the underlying facts to decide whether information provided by management is fairly presented.

Auditors should develop a written audit program so that:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters

Exam 7: Auditing Information Technology Bases Processes

The IT auditing approach referred to as "Auditing through the system" is necessary under which of the following conditions?

Audit tests developed for an audit client are documented in an):

Which of the following terms in not associated with a financial statement auditor's requirement to maintain independence?

The existence of IT-based business processes often result in details of transactions being entered directly into the computer system, results in a lack of physical evidence to visibly view.This situation is referred to as:

The chance that information used by decision makers may be inaccurate is referred to as:

This type of audit is performed by independent auditors who are objective and neutral with respect to the company and the information being audited.

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

Adapting to fair value measures in the preparation of IFRS-based financial statements will likely cause auditors to evaluate supporting evidence differently than if US GAAP was used.

Independence in mental attitude is to be maintained in all matters related to the audit engagement.This is one of the generally accepted auditing standards that is part of the:

Which of the following describes a mathematical sum of data that is meaningless to the financial statements but useful for controlling the data and detecting possible missing items?

Auditors have the primary responsibility to make sure that they comply with international standards in all cases.

The use of generalized audit software is especially useful when there are large volumes of data and when there is a need for accurate information.

All users of financial data - business managers, investors, creditors, and government agencies - have an enormous amount of data to use to make decisions.Due to the use of IT systems, it is easy to verify the accuracy and completeness of the information.

Computer-assisted audit techniques are useful audit tools because they make it possible for auditors to use computers to audit large amounts of evidence in less time.

Auditors must think about how the features of a company's IT systems influence its management assertions and the general audit objectives even though these matters have little or no impact on the choice of audit methodologies used.

Which of the following computer assisted auditing techniques processes actual client input data or a copy of the real data) on a controlled program under the auditor's control to periodically test controls in the client's computer system?

The likelihood that errors or fraud may occur is referred to as:

The role of the auditor is to analyze the underlying facts to decide whether information provided by management is fairly presented.

Auditors should develop a written audit program so that:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters